Would it be a good idea to build a village at spawn? I was planning on putting farms such as pumpkin/melon farms in it and was wondering if these would generate too much lag.
Just test it - I don't think there will be an issue
Ironfarms are absolutly worth standing in spawnchunks. I've heard that plants get unloaded if you leave the spawnchunks,
that might even effect grassblocks. Sheeps however keep eating, so woolfarms might work. That is, if grassblocks work.
I can confirm, that chickens keep laying eggs when you leave the spawnchunks.