I run a fairly standard Microsoft stack of ASP.NET, IIS, C#, SQL Server. Chosen for its boringness and reliability, because as I've said before, I really don't like having to worry about hardware:
http://www.expatsoftware.com/articles/happiness-is-a-boring-...
I'm also speaking from experience about the downtime thing. I used to have a rather sketchy ISP, and would see those 7 hour downtimes from time to time. I would occasionally get an email or two from customers who noticed, but never lost a single paying account as a result of downtime. Maybe it's just picking a market that can live without your thing for an hour if need be, but then that's the goal we're talking about of a SaaS business that runs itself without your intervention.
People worry about a lot of things before starting a business. They use things like "what if the server goes down" and "what if my customers call me every night at 3am" as excuses not to even try. But when you actually do try, you find that none of those things you worried about end up happening.
That's not to say it's easy. But the things you're raising as issues just aren't. In my experience.