I don't think it is good practice to put any QV Server/Publisher pieces on the same server as your Database. I think the workload could be too high. However, you can definitely install the Server and Publisher on different servers.
Have you looked at the application to see if the App can be optimized more? Maybe there are cartisian joins, or loops, or maybe some inefficient formulas.
How long does the Publisher reload take, versus doing it manually?