When you create a function app in Azure, you must choose a hosting plan for your app. There are three basic hosting plans available for Azure Functions: Consumption plan, Premium plan, and Dedicated (App Service) plan.
For the Consumption plan, you don't have to pay for idle VMs or reserve capacity in advance.
Connect to private endpoints with Azure Functions
As enterprises continue to adopt serverless (and Platform-as-a-Service, or PaaS) solutions, they often need a way to integrate with existing resources on a virtual network. These existing resources could be databases, file storage, message queues or event streams, or REST APIs.
Reference:
https://docs.microsoft.com/en-us/azure/azure-functions/functions-scale
https://techcommunity.microsoft.com/t5/azure-functions/connect-to-private-endpoints-with-azure-functions
/ba-p/1426615

Explanation:
Box 1: Yes
Be sure that the destination is in the same region as your database and server.
Box 2: No
Box 3: Yes
https://docs.microsoft.com/en-us/azure/sql-database/sql-database-auditing Reference:
https://docs.microsoft.com/en-us/azure/sql-database/sql-database-auditing
https://docs.microsoft.com/en-us/previous-versions/azure/dn741340(v=azure.100)?redirectedfrom=MSDN

Explanation:

If you are looking for Transport Layer Security (TLS) protocol termination ("SSL offload") or per-HTTP
/HTTPS
request, application-layer processing, review Application Gateway.
Application Gateway is a layer 7 load balancer, which means it works only with web traffic (HTTP, HTTPS, WebSocket, and HTTP/2). It supports capabilities such as SSL termination, cookie-based session affinity, and round robin for load-balancing traffic. Load Balancer load-balances traffic at layer 4 (TCP or UDP).
References:
https://docs.microsoft.com/en-us/azure/application-gateway/application-gateway-faq

Explanation:

Box 1: Yes
Box 2: Yes
Box 3: Yes
For more information on Azure SQL diagnostics , you can visit the below link https://docs.microsoft.com/en- us/azure/azure-sql/database/metrics-diagnostic-telemetry-logging-streaming-export-configure