@Ken, "Servers are simply underpowered." The drawbacks of lower end virtualization I suspect, Ken.
The issue is really the amount of RAM available, I suggest. If you have a 2GB RAM limit, and access to only one core of the CPU, then it's going to run slow, and under pressure, it will slow significantly. When I am running VMs I allocate 2 cores and a minimum of 4GB of RAM, performance is not that fast it couldn't be better, but it is not that slow that I can make a coffee between loading an app and sitting down to use it. The i3 CPUs were all 4 core I believe, so you would likely be sharing the CPU with at least 2 other users and one core for the bare-metal hypervisor, or whatever system your provider uses. That's as far as I have pushed VMs, and there were significant performance issues, so I'm not willing to try any further. I had a Win10, a MacOS and a Ubuntu Linux running on a Win7 host, using VMWare Workstation Pro, an i3 CPU with 2GB RAM for each VM. The host machine has 16GB RAM for the host. The results were....mmmmm.... discouraging. Running a memory hog like PHP/MySQL is not likely to work well, I believe.
As far as the errors are concerned, there may be some software issue, but I suspect that memory allocation is too slow and Moodle is outrunning it, or perhaps, allocation and releases are happening out of sequence, so errors are being thrown. But these are just guesses that may or may not be helpful at all. Ask your provider if you can upgrade your memory to 4GB for a month or so, see what happens.
