Keep in mind that this doesn't mean you can only chat with 5 people. You can chat with anyone who uses Matrix. You can only have 5 people with addresses at your server. Basically identical to email hosting with a 5 account limit.
Yep, as you say, you get to chat with anyone in the Matrix ecosystem (or even further afield if you use bridges).
> You can only have 5 people with addresses at your server
Actually, it's better than this. You can technically have as many people / accounts as you like registered on your server, but you're limited to 5 active users by default. Users are considered "active" if they've been logged in to and using your server for more than two days in a given 30 day period.
