I just setup a VPS for a Minecraft server for some friends and did exactly that. I was under a bit of a time crunch, but still took the time to think through those challenges in access for everything. Created an unprivileged user to run the server as, created a seperate unprivileged user for another service. Disabled password-based SSH login, etc.
I should probably setup a dedicated non-root admin account for administrative functions but that’s a problem for after work