Full Disclosure: I work for a company that provides this sort of service.
Have you discussed your problems with the service with anyone at the provider? I know if you are a user of our service we would very much want to hear from you. I can't guarantee that we'd be able to fix your issues, but my bosses would be more than happy to discuss them, and fix them if they could.
Do you have your own InDesign Server license? That's the first thing you would need to bring this in-house, and the investment is non-trivial. I'm not a programmer, but I know that it takes a fair bit of skill to build a website that interfaces properly with our service, so I would presume you would also need someone knowledgeable in both web design and server-side scripting.
1. What is the back-end server requirements to be able to render the finished PDFs?
You need either a Windows or Mac server and a licensed copy of Adobe InDesign Server ("IDS"). IDS takes SOAP requests that tell it what script to run, and scripting the server is generally the best approach unless you have some really special type of situation where a C++ plugin is needed. Certainly updating templates and generating PDF can be done with a script. You send a SOAP request to the server telling it what script to run and what template to load, and where to put the PDF. You can download a trial of IDS from Adobe.com.
2. Does anyone have experience building the InDesign Plugins that can connect to a back-end rendering server?
Our company, Silicon Publishing, has a ton of experience connecting to InDesign Server, as we have been a solution provider and re-seller 8 years, producing large-scale solutions for Shutterfly, Royal Carribean, Nike and many others. We can render on the server via plugins, CS and/or CC extensions, and/or scripting. This is definitely our sort of project, and we can either consult/train or build a complete solution. You can contact me at email@example.com