Hi @kennethfan123
Firstly, I would recommend going through these two links:
1. https://en.support.wordpress.com/com-vs-org/
2. http://www.wpbeginner.com/beginners-guide/self-hosted-wordpress-org-vs-free-wordpress-com-infograph/
Is self-hosted WordPress equivalent to WordPress.com with premium features ?
(The reason I am asking this is because initially, I thought that I need to self host WordPress and then engage WordPress.com separately for premium features like css modification.)
Self hosted WordPress is not the same as WordPress.com. When it is self hosted you are entirely in control of hosting, domains and any problems that you may face on the website. On WordPress.com, you can get help and support from a dedicated team that works for a company called Automattic who run and manage WordPress platform hosted on their servers and also help you troubleshoot any issues. When you are self hosted all issues are supposed to be your responsibility although you can post to forums like these and hope volunteers help you out.
In free WordPress provided by WordPress.com, plugins can only be used in widget area. For self-hosted WordPress, can I use the plugins anywhere in my website ?
You should be able to use it the same way you use it on WordPress.com. Not sure what you mean by “anywhere else”
Why is the list of free themes different between WordPress.org and WordPress.com
Themes in general are different because on WordPress.org you are allowed to modify a theme and change CSS etc. I don’t think that’s what you can do on WordPress.com
I noticed that the themes in WordPress.org are categorized into free and commercial but not plugins. Are the plugins in WordPress.org free to use ?
Most of the plugins will have a “freemium” model. Certain features will be free and add on features will come at a cost. So not all plugins are entirely free. The same applied for themes. You can get premium themes to. One such popular website is “Themeforest”
Are the free themes listed in WordPress.org free to modify ? Is it legal and ethical to do so ? (Additionally, I read from somewhere that CSS modification might open a loop-hole for security attack)
Most of them have licenses that allow you to modify but post modification you cannot sell it for commercial purpose. So the best idea would be to read the kind of license on the theme or contact and speak with the author regarding your intentions. On the security front not sure what you read exactly, but not just CSS modification, other modifications anywhere in your code could open up a loop -hole for breaching security. If you are working with real sensitive data it would be best to get it validated by a software security professional if you are not one yourself or are not confident of the code.
Hope that answers most of the questions.