For DNS servers, I would look at Privacy Guides recommendations. They have some good options, but if you are going to use a VPN I would just stick with their default DNS server. Mullvad, IVPN, and Proton have good content blockers in them.
As for Mullvad DNS speeds, I never noticed any slowness, but I think it depends where you live: DNS over HTTPS and DNS over TLS
Personally, I use my VPN all the time. But the only times you shouldn’t is when you login to websites with your real identity, such as your bank account or school accounts.
But keep in mind that a VPN will not fully protect you, it’s really just to hide your IP address from websites and privacy from your ISP.