Hosting is the server environment where website files, databases, and applications are stored and served to visitors.
It matters because development decisions affect speed, security, scalability, tracking, SEO, and maintenance. A site that looks good but is fragile or hard to update can quietly hold back every marketing channel.
Example
A WordPress site needs an environment that can execute PHP and store its database as well as serve images. The hosting plan must support those requirements, backups, and expected traffic, not merely provide disk space.