Yep, Veeam B&R management server can be installed on any Windows-based machine, regardless it’s physical or virtual. It is where you place backup proxy server components what is more important in terms of performance (though, I admit, the default proxy installed as a part of Veeam B&R installation is more than enough for small environments). Just consider system requirements for the proxies, the rule of thumb is a single core and additional 200MB of RAM per each concurrent task you're going to assign to this server.
As for the backup target, then the most effective backup storage for Veeam B&R from the cost/quality perspective is an ordinary server stuffed with a bunch of hard drives (or directly attached to it).