This sounds like a rather weird issue. I agree with your take that grub is not the problem. It seems that there is some issue with the kernel, or the initramfs systemd… Downgrading the kernel didn’t resolve it, so maybe it is a corrupted disk after all? Some suggestions:

1. Run fsck on the partition from a live USB if you haven’t already
2. Enable more verbose logs from the kernel and the initramfs systemd. The LLM suggests removing quiet splash and adding rd.debug systemd.log_level=debug systemd.log_target=console ignore_loglevel (best check the actual parameters yourself).
3. If possible for you: Copy the install to another drive, change the UUIDs, and try again with that.

Debian also supports “unattended-upgrades”: https://wiki.debian.org/PeriodicUpdates

I actually have it set up the same way on both: Automatically install updates (and restart some services), but don’t reboot. I don’t think it was different/easier on Ubuntu.

Overall, the two distros are very similar for a server application. If you’re already running Debian on your PC, I would also go with that for a server.