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I'm experienced in HTML and web marketing but know nothing about server OS and other issues so layman's terms please!
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You DO NOT want a VPS in this case, perhaps consider a fully managed VPS where the supplier will do all the technical bits (but be prepared to pay well for this and ensure that the supplier is offering full management, not just remote hands or employ a server management company to manage the VPS)
Why would the developer want to use a remote shell? Most things a web developer needs to do are done on the source files which are then uploaded (exception is restore of very large SQL databases) For a production server, then your developer should only be touching it for new installs or planned site updates, not let loose with shell access.
Unless you really need full control, why not start out with a reseller account, this will give you a master web control panel to create seperate accounts for each new domain.