Being a webhost myself, I may be able to answer a lot of your questions.
Basically, the main reasons to have a website(and thus a webhost to provide that), is for league communication and a place to display your league reports(all those pretty html pages with standings, league leaders and team pages) to the public. There are some OOTP guys who like to lurk on websites, either out of casual interest in the theme of the league, or potential interest in joining the league. So having a forum/message board shows a lot about the general atmosphere of a league and it's organization.
That said, you don't need a website at all, especially for just a few league members. You can sign up for some of those file sharing places like RapidShare to make your league file available to your league members. They will not be able to update after sims in-game like they would if you had a website with an FTP account, but they would be able to download and unpack the file manually after each sim.
League members can easily email you their export files and you can just put them into your league.lg/import_export folder and import them via the game and run your sim.
And the cycle repeats itself.
If you plan on filling all teams in a league of 16, 20, 26 or 30 teams, you may want to have a website to have FTP(allows the game to place files on a server where your league members' games can access with simple clicks of buttons in-game) and make the process easier for everyone before and after each sim.
If you have any other questions, post here and I'll be glad to answer them
