Every dollar into this project is borrowed at various interest rates.

Sure you can sell it and take that cash and put it into something that you can manage yourself, but with an interest rate as low as you have it for, I would not.

It definitely can help add time back into your life and they can be a great source of information on vacancy rates, current market rent rates, etc. 

Chances are you'll want to refi in a few years anyway once rates fall.

The seller is paying 20k in mortgage interest, given the current interest rates I would need to 45kish in mortgage interest for the said STR.

There are plenty of lenders that don't require experience to lend, but leverage/rate might be altered a bit.

I keep wondering about insurance, vacancy rates, if tenant selection is a bigger/ different factor, terms of the tenancy and differences in opex and capex?

In some markets you won’t get the higher booking rates and occupancy numbers without a pool (Florida and Arizona come to mind). 

Despite challenges such as higher mortgage rates and limited inventory, the market shows positive growth indicators.Property PricesHome prices in Birmingham are forecasted to rise steadily over the next six months.

It can be challenging for 1-4 units depending on the property characteristics, your loss history/other rating factors, and location.