It means 5 times the number of failures as you intentionally put in an extra unit so that one can be taken offline at any time for maintenance (which itself will keep the whole system more reliable), and if one fails the whole keeps up. The cost is only slightly more to do this when there are 5 smaller units. Those smaller units could be standard off the shelf units as well, so it could be cheaper than a large unit that isn't mad in as large a quantity - this is a consideration that needs to be made case by case)

Even if you cheap out and only install 4 units, odds are your failure doesn't happen on the hottest day of the year and so 3 can keep up just fine. It is only when you are unlikely that you need to shut anything down.

Maybe not, but some cooling means less servers to shut down.

Four service degradations vs. one huge outage event. Pick your poison.