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Can someone please help me on the below questions,
This document explains where to get the values: Configure a development environment (.env) file - Commerce | Dynamics 365 | Microsoft Docs
So it depends on what you are trying to achieve. The MSDyn365Commerce_BASEURL allows you to point to one of your scale units so that as you are building and testing modules you can get live data from those servers to test with. However this isn't necessary if you are building and using mock data to test with. The MSDyn365_HOST value allows you to view your live production or sandbox environment rendered on your local Node environment. So for example lets say you start changing modules and themes, you can see how they would look on your live site but rendered locally. That's when you would use your localhost:4000 URL, you should see your live prod/sandbox site the same as if you took the URL you provided in the variable and opened it in browser. This is also not required when building with the SDK, just extra support, it's also helpful in debugging issues on your live site, because then you can put breakpoints in code on the local dev environment and step through.
Hope that helps,
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