Proxmox sounds like it fits their use case , it’s a useful and tweakable solution, and because it’s based on KVM you can pass through hardware with IOMMU. Personally, I run Proxmox on my (admittedly not very good) home server with like 12 gigs of ram and a processor from the early 2010s, handles a few VMs just fine with hardware passthrough to a TrueNAS VM. I do run a lot of my micro services on some cheap thin clients (DNS mainly) for redundancy as I mentioned, they were cheap. Home Assistant OS is happy on Proxmox as is Jellyfin with hardware acceleration.

If you want a real fully featured solution, the Home Assistant companion is capable of location tracking and I believe you can send events that push an update, although it may not be accurate. There is also Locate My Device which I’m pretty sure is FOSS and works over SMS, a much lighter solution for your problem but not as convenient with like a Web UI and some such.