Make sure you are using the “Approximate” generation method instead of the “Simplify” one, which uses far more resources. You can take a look at the City samples which can be used as a starting point to setup HLODs.
Not really, since you are most probably running out of VRAM, not main RAM.
On the Matrix demo, we used a multi-machines setup for building HLODs, but it can be tricky to set up depending on how your “build farm” is configured. The HLODs documentation at World Partition - Hierarchical Level of Detail in Unreal Engine | Unreal Engine 5.0 Documentation doesn’t include that information but I’ll see to get it updated for the next release with that information.