I think the workings of Tailscale have been answered pretty well already.

As far as ideas for server usage go, I have a similar setup with the following on my server:

• PiHole for DNS filtering and custom internal DNS entries for my devices/services
• Unbound DNS server to free myself from public DNS resolvers (Google, Cloudflare, Quad9 and the likes)
• Unifi Controller (for my Wifi APs)
• ResilioSync (for syncing important files between all my devices and server)
• Homeassistant + Mosquitto (MQTT Broker) + ESPHome for all home automation
• Huginn (scrapes the web for changed content or news and creates notifications for me on Telegram or Discord, maybe somewhat comparable to IFTTT but self-hosted)
• Homebox (home inventory management)
• ActualServer (budgeting app)
• Jellyfin (media streaming)
• an assorted collection of apps I refer to as the “High Seas”, which are Radarr, Sonarr, Lidarr, SABnzbd, etc.