Morning Ian,
I'm just a hobbyist so forewarned.
I use LXD on Ubuntu Server and it works well on my VPS. I have mail, database and web containers and a couple of others. I had some issues with nested Docker inside LXD but that is probably just my lack of knowledge letting me down.
Using nginx as a frontend proxy to route the web stuff, rest gets routed as needed to the local container IP's as needed, e.g. mail, database.
Short answer. Yes it works. As far as the details, someone else is probably best placed to answer those questions! ;)
Cheers
Brendan