Question 1: Will it be technically feasible to install multiple Proxy Clients on one server? (We will need this because there will be number of customers to be on boarded in this set up)
Yes, it is technically feasible to install multiple proxies on one server. Actually, you should do that for failover reasons. There is a setting in the config, which informs a Proxy about other Proxies for failover
Question 2: Will it be technically feasible to install Proxy clients on a separate server than Automation Engine?
This does not matter as long as a connection to the CPs can be established.
Question 3: Assuming, Question 1's answer is yes, How many Proxy clients can be installed on one server? Any sizing reference to Vertically Scale a server to host upto 10 proxy clients? Any sizing g###@uide line to Horizontally scale Server hosting multiple proxy clients? Depends on the server size. There is no sizing guide available. Start one proxy and you will find out, how much space and memory it takes.