Is the latency from having your database and hosting separate something to be concerned about?
Some more detail, we’re based in the north east USA. Would using a mix of compose.io and galaxy hosting be an issue for a “casual/prototype/mvp” production app?
Based on what I’ve read on this forum, it seems splitting up the two is pretty common. But I’ve read elsewhere that this can cause major latency-- is this something to be concerned about?
Nope, unless you are dealing with a really high throughput application, this is pretty common and negligible.
Do a ping from one to the other and see. I use EC2 and Mongolabs but both are in the same amazon server farm and the latency is really low. If there’s plenty of communication going on I’d be wary of the latency being too high, Meteor is great because of how quick it is 
Normally no, it would be more concerning if all would be running on the same server.
It’s quite unclear what kind of app you mean, for prototypes almost everything is fine. In production you can have totally different requirements based on the need for performance, scalability, security etcetera.
But still, separate servers or even providers is the way to go. What is interesting though its that you might want to keep them in the same data center. Compose offers specific AWS and DO datacenters: Data Centers | Compose https://www.compose.io/digitalocean/ so you can choose the right one.
No in general not. Exceptions can be very heavy computations which involve lots of database activity. Think of complex equipment loggings thousands of measurements per second. For web/app like usage there are not many of those things to be found. For sure it won’t be a bottleneck in the beginning.
Thank you everybody for all the great answers