When using a server with a domain name suffix, I have always changed the computer name to reflect this. If I were given web3.contuso.com as an FQDN, I would change the computer name to WEB3. I know this is optional. Why would you not do it?
In a purist sense you can say the FQDN is made up of the hostname and the domain name. In this case server-42 would be the hostname and example.com would be the domain name. The FQDN would be server-42.example.com. < SPAM LINK>
Fully qualified means that it’s the entire domain starting with the root domain (.) We tend to leave the extra dot off the end but in DNS “example.com” is actually “example.com.”
This can become more complex. You could have a sub-domain. For example server-42.boston.example.com. In this case the hostname is the name that identifies the specific host so it would be server-42 rather than server-42.boston and the domain would be boston.example.com.
FWIW I think people just don’t like saying FQDN (it’s a mouthful) and say hostname when they mean FQDN but they’ve been doing so for so long it’s an accepted norm.