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You could think of the sites that share your server as your roommates; there's really not that much separating you from them. Sure, you can close the bedroom door, but they can still cause nightmares for you in the kitchen and the bathroom. In web hosting terms, all the sites share a single server's resources, so huge traffic spike on Site A may impact the neighboring sites' performances. It's even possible that another site could take down the shared server altogether, if it crashed hard enough.
In all Website Builder plans any data transmitted from your site will be encrypted using a SSL (Secure Sockets Layer) certificate. Your SSL will establish an encrypted link between your web server and the browser of the person visiting your site. This means that all data will be kept private; which is important if you want visitors to your site to be safe. If you want to sell products or services in your store, you will want to have a SSL since it protects credit card and bank numbers from being intercepted by hackers.
You gain the most web-building functionality if you create a self-hosted site. This typically involves transfering the free WordPress CMS to server or signing up for a web host's optimized WordPress plan. With an optimized plan, the host automatically handles backend stuff, so you don't have to worry about updating the plug-ins and CMS, and enabling automatic backups. In these instances, the WordPress environment typically comes pre-installed on the server.
Allows clients to become web hosts themselves. Resellers could function, for individual domains, under any combination of these listed types of hosting, depending on who they are affiliated with as a reseller. Resellers' accounts may vary tremendously in size: they may have their own virtual dedicated server to a colocated server. Many resellers provide a nearly identical service to their provider's shared hosting plan and provide the technical support themselves.