Mike touched on this a bit in the article, explaining that the “exact match penalty” targeted low quality sites that were overly-reliant on their seemingly-relevant domain name for rankings. Everything is an exact match for something so if you build a great resource, it shouldn’t be an issue. (For instance, I get a ton of search traffic for “side hustle nation”…)
The reason you need to understand this before you learn how to start affiliate marketing is because you need to choose your interest (or interests) wisely. You’ll be spending a lot of time researching and writing about your chosen topics, and so they need to be something you’re passionate about, not just something you think is popular and will get you a lot of traffic. You may be right, but you’ll quickly burn out as you either run out of things to say or you begin to hate your topic instead.
If your domain is your address, hosting is like the actual house within which your site will live. It's your own little slice of the internet — the place where all your website files live. Hosting is very affordable these days, so don't unnecessarily scrimp on costs. Go with a reputable, reliable provider because your affiliate marketing business depends on it.