I'd like to add something to Troy's response.
1. What are the minimum requirements in terms of hardware spec for all these 4 components on the architecture looking a small scale deployment where the DA & DC run on the same system?
I've been doing POC installations with just 2 systems: 1 PC+DC, 2 DR+DA. You cannot collocate DA and DC on the same machine, they both use Apache Karaf. If you try to install the DC after you install the DA, it will break the DA installation. You can only use it for capabilities testing and not for to many devices.
2. With the hardware spec listed above for PC, is that enough to run on a test environment with minimal devices?
The minimum that I use is 4 CPUs and 12GB of RAM, for each of the 2 machines. The PC 100GB of disk space and the DR 200.
3. What version of PC should be running on PM 3.5?
As Troy was saying, all components should be on the same version. You should also consider the versions of other DataSources that you'll need synchronized with PC. The latest 3.5 might not work with all your other installed Data Sources.
4. Should we upgrade the current PC or do a clean install on a supported OS latest version?
It would depend on your environment. Direct upgrade from 2.3.4 to 3.5 is not possible. You'd have to perform two additional upgrades: to 2.6, to 3.1 and then move to 3.5. You should also consider an OS upgrade during this procedure, so it can get very complicated. All of this should be tested in advance and then reproduced to production system. If you don't have things many configured dashboards and customization in PC, it would make more sense to install everything from scratch with the latest version available. This describes the process.
5. *Can a DC/DA co-exist in the same server with a UIM Hub?
In theory, the DC yes as long as yo have sufficient resources assigned. In practice don't. You'd have to be very careful about ports usage. Each component requires a different port and you might end-up with extensive reconfiguration that would have to be performed. Upgrades can be tricky afterwards. Restarts would impact both components. There more cons than pros to a scenario like this. The DC in the latest installation does not require that much resources either, with a minimum of 4CPU and 8GB of RAM and up, considering the monitored environment.