Computers communicate by using numbers, called IP addresses, to contact each other, much like you use a phone number to dial a specific person's phone. Domain names on the internet are much like entries in a phone book. The phone book tells people looking for a business what the entries are just as a domain tells people (i.e. their computers) that a domain is hosted on the server.
Without a domain, you would have to tell your customers that your site is located at a temporary url such as 123.456.789.123/~mysite instead of using a domain name such as mysite.com, making your site appear unprofessional and impractical.
The web-hosting or server is much like the space that you rent out to have your business in. It's merely the space itself. It does not include furnishings like shelves for your products, just as the web-hosting account doesn't include a site for you to sell your products.
Without the hosting services, you won't have a place for your files to reside, so your domain would then become like a disconnected phone number in the phone directory, and your site files would have nowhere to stay.
Every project is different, and the time and skills required vary greatly. Therefore, so does the price - I quote for each individual project after an initial discussion to understand your requirements.