I would start by answering all your questions and then conclude what i think . I am a webdesigner and I use wp multisites to showcase different sample sites. I do not allow user registrations
Q: sign up process to be fully automated.
Ans: Network admin > Settings > Network settings > Allow new registrations
Changing this will make it automated for users to create their own subdomain in your WP
Q:Update new versions of WordPress quickly and add new themes.
Ans: If you are the network administrator when you login to your account . It will show you what updates are available and you can choose whether to update or not.
In simple words . You own the right to what other users can or should use and what not to use
Now as you said about database. No doubt your database would become humongous and it will be painful if you have to do some changes in the database are you going to do manual changes to database more often ? ask yourself !!!
I see that your network provider gives you unlimited hosting and bandwidth but think it in this way.
WP multisite is one site running in different modes . So for eg: if you have one site you get 100% speed. If you have 2 each sites will get 100/2% speed .... But it will only happen if both sites are being actively being viewed at same time.
Just to give you another example . When you run too many softwares or programs on you laptop or PC or Mobile simultaneously it tends to lag and at the end fails to respond . It happens because all the programs shares same OS RAM and DISK . So if you end up having more then what you website can handle one or the other website would fail to load it would take decades to load .
CONCLUSION: WP Multisite is a good options for what you want . Just keep an eye when your websites tend to get loaded and the disable further registration..
Hope you got answers to what you were looking for . Got more questions . Feel free to ask