Whether you develop a website on virtual/VPS/semi/dedicated web hosting does not matter,and the process can be the same (i.e. preference). There is no ONE WAY every one does it.
Some prefer to develop a website locally on their PC, and then upload it once completed. Others prefer to do development on the server, and upload or modify on the server. So they do their coding and what not as they go along with a live website. Some will leave up the index page, and work on it from a folder or renamed file.
What type of web hosting you have does not make a difference in regards to website development.
/2cts