Load balancing concept

Hi. I'm new in Photon, and I want to understand few basics ideas of it.

let's say, I have one VPS. And I try to start Load Balancing instance by Photon Control.
In documentaion says "Loadbalanced setup for local development: A Master-server and two game-servers."
and config

		<Applications Default="Master">		
			<Application
				Name="Master"
				BaseDirectory="LoadBalancing"
				Assembly="Photon.LoadBalancing"
				Type="Photon.LoadBalancing.MasterServer.MasterApplication"
				ForceAutoRestart="true"
				WatchFiles="dll;config"
				ExcludeFiles="log4net.config"
				ApplicationRootDirectory="LoadBalancing"
				>
			</Application>
			
			<Application
				Name="Game"
				BaseDirectory="LoadBalancing"
				Assembly="Photon.LoadBalancing"
				Type="Photon.LoadBalancing.GameServer.GameApplication"
				ForceAutoRestart="true"
				WatchFiles="dll;config"
				ExcludeFiles="log4net.config"
				ApplicationRootDirectory="LoadBalancing"
				SharedDirectory="Plugins">
			</Application>			   
	
		</Applications>

And first question is: where is second game server? Or game-server instances are dynamically genetated?

Ok, next I'm thinking about servers and balancing.
How exacly servers are takes a hardware resource? One instance - one CPU? Thread? Why I need to use load balancing rather than Hive?
For example, I need to create 100 rooms with 50 users each in my real-time (fps) game. Maybe Hive-type will be enough.. I think not. But why?

One more question is: can I run Master and Game servers on different VPS? Is it possible?