*) You can use whatever FQDN as server hostname. e.g. mail.example.com, mail2.example.com. But please do not use the email domain names which you're going to serve mail service. For example, if your email address will be xxx@example.com, then do not use 'example.com' as server hostname; if it will be 'xxx@mail.example.com', then do not use 'mail.example.com' as server hostname.
Let's say your mail server has hostname 'mail.example.com', this server hosts multiple mail domains including 'example.com'.
*) In DNS control panel, add an A record for your server hostname. e.g. mail.example.com, point to the IP address of this server.
*) Add MX record for your mail domain, e.g. example.com, to the server which hosts this mail domain - 'mail.example.com'. NOTE: MX record must be a FQDN which points to a valid IP address, not an IP address.
MX record is used for mail service, other ISPs like Gmail/Yahoo will query MX record of your mail domain, then deliver emails to the servers listed in your MX record.
It's better to read some documents about A/MX records. Google is a good teacher.