The Strato S definitely counts against the recommended 4 server limit (and it can only serve 1 UHD playback at a time) so switching to a Strato without storage would be a better option from a performance standpoint, yes.
As for Co-Star, all Stratos other than Strato E and Strato M support system level Co-Star pairing (i.e. Co-Star pairing to a Premiere system with M-class players). Note that Strato V and Strato K must be running in grouped mode with a Terra. Strato K and V do not support Co-star pairing when in standalone mode.
Only original Strato, Strato S, and Strato C support Co-star player pairing with an Alto. Strato K, and V do not support this mode.
As for Co-Star, all Stratos other than Strato E and Strato M support system level Co-Star pairing (i.e. Co-Star pairing to a Premiere system with M-class players). Note that Strato V and Strato K must be running in grouped mode with a Terra. Strato K and V do not support Co-star pairing when in standalone mode.
Only original Strato, Strato S, and Strato C support Co-star player pairing with an Alto. Strato K, and V do not support this mode.