It’s mostly minor shit, it’s better than the alternatives unless you self-host (which has a boatload of other issues).

Encryption in transit even internally is a good practice. That said, op is making life hard by refusing to use DNS.

I feel like op is about to find out why businesses pay for cloud services.

You just described a load balancer. The router doesn’t know about DNS but clients using your service use DNS. You can do some simple load balancing behind DNS. If you want to do it by IP address you want a load balancer though.