If I set up my own Nostr relay, can I use that for hosting and build a "Nostr website"? Sorry if it's a dumb question, I'm not a tech guy.

not exactly. relays could be used as distributed storage of static content. you could setup a server locally with tor exposing an onion address which circumvents the dns issues but discovery can be a pain

What about an .ai or .Io domain? I see those quite frequently.

2 letter tld are country codes. indian ocean and anguilla respectively

I found something called PeerName. I paid with Lightning and only gave them a proton mail address. Got myself a nice little .bit domain 👏👏👏

can only get to those with browser extensions or manually mapping host entries locally.