Long answer require some technical knowledge that you clearly don’t possess and would just give you an headache.
To put it simply, if your app get successful and lots of users adopt it, you are bound to exceed those arbitrary limits.
Thing is, offering free api is not sustainable but you could offer some half way option, like including some ads in the apis responses as well and have the devs agree in showing those ads (I’m talking banners and the like) so that you can assure your ads clients that they are going to be shown anyway even by third party apps.
If course you can then go nuts on the penalties for infringing that agreement.
What is Reddit doing is basically saying, you can use our APIs if you are doing a school project.