As a happy user since 2015, thanks for such amazing distro and experience.
Long live Arch!
On Arch I run sudo pacman -Syu almost every day.
You could run something like this to get a warning if there is anything that requires manual intervention: https://github.com/bradford-smith94/informant
I also run my laptop with Snapper: https://wiki.archlinux.org/index.php/snapper
I use a btrfs root volume with btrfs subvolumes instead of separate partitions. I have snapper setup with a pacman hook to take a snapshot before and after every pacman run. So worst case, if something goes horribly wrong, I can boot from an Arch install image into a previous snapshot and unbreak things.
I update weekly to daily, but sometimes also a month goes by (e.g., if I'm on vacation or the like), never had an issue, never had any breakage. I reboot on kernel updates, downtime is a few seconds which I can deal with.
The VM is only single core, 4GB memory, 40 GB disk space - chugging along just fine.
Personally, I'd always feel safe and good with choosing either Arch Linux, Debian or Alpine Linux as VM/CT distribution (my underlying hypervisor would be Proxmox VE, which derives from Debian).
I'm giving my personal experience here, of course depends on the case, but even kernel or Arch related upgrades that I do weekly are also smoothly.
Historically, I've had more pains with upgrading on Ubuntu-based distros (but in all fairness I've been using them for much longer).
Also, the fewer AUR packages the better. Nothing too different from BSD packages vs ports.