What’s the difference between my Hosting and my Domain?

Think of your website as a physical building you lease, to sell your goods, display information, and warehouse banners/graphics.
Domain/URL = Your business phone number & address (www.example.com) that tells people where you’re located.
Hosting = The yearly lease to rent your building. The size/expense of the hosting translates to how many people can fit inside your store to shop, and how fast your website runs.
You need both of those to operate a website.
You can renew both of those for more than 1 year at a time, and it usually gives you a good discount. So if you’re confident you’ll keep both your domain and your hosting plan, you could do multiple years. You don’t need any addons for your hosting.

You may outgrow your Hosting (think of your current hosting as a small shop – you may want to upgrade to a medium-sized shop in a year or two, that can hold more visitors/people shopping).
Personally, I usually do 5-year domains. Google can notice how long your domain has been registered for, so the longer you’ve held your domain, the more authority Google gives you in that category.