Hi protoss,

First and second, both options are possible to read data from the SQl server. 

Refer to the article below for reading and writing connection strings in the web config file. 

Read or Write Connection Strings in Web.Config file using ASP.Net using C# and VB.Net

Refer to the link below for connecting to a remote SQL server. 

How to connect to remote SQL Server

Thanks, PrinceG!

What about other options - on commercial hosting?

Could be good as an option...

It is applicable to all the option.

You just need to get the connection details from the hosting company.

IPAddress, UserName and Password. Finally database what you have to used.

Then set all in the web.config file and use in your application.