How do you host game servers on dedicated servers?

So I've looked into renting a dedicated server in order for me and friends to spin up a game server when we feel like we need to.

Here is my idea..

We have a admin dashboard website with a section called let's say Minecraft, we can then click "Add new" and it will show you all the parameters for a new server such as max players etc. Then once you've filled all that in, you click "Create".

At this point it would notify the dedicated server somehow and run a script that spins up a Minecraft server with said paramters.

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Is this how it works or am I way off? I would love some more in-depth information on how things like this work.