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I don't understand properly the term micro service if services aren't separated in a "network" way.

The abstract notion of a service has nothing to do with an execution model. It simply means a well defined interface to some meaningful unit of functionality.

Properly designed, the execution model is orthogonal and the service itself doesn't care if it's invoked in-process or not. It delegates that to some other manager, which probably has a service interface of its own.

It's about sane abstract system boundaries, not mapping to real world facilities.

You have an entire A-Class network(127.0.0.0) within a single VM. That makes ~2^24 possible adresses and 2^16 ports. Isn't that enough of a network?

it's more like "Why would you put multiple process on the same instance instead of just using a monolith app, the overhead for IPC / network isn't worth it if you put every process on the same machine"

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