I felt the same way about youtube, streaming, shopping and general browsing: too many ads. Ruins the content. I set up a pi-hole as an experiment to see if it would do what it said and what others said about it. Manage your expectations here. Pi-hole works well for blocking a lot of static information and ads in your browser and a lot of apps on iOS and Android. It does not block video ads on Youtube or Hulu, it does not block ads for Roku or Firestick or Smart TV apps for example, it just does not work because of the technical limitations of how the PiHole software is designed. Using a regular PC with adblock browser extension installed as well gets rid of 99% of ads including video ads from adcdns. PiHole is incredibly easy to setup and install, the pay off in quality of life is enormous. I cannot recommend it more to someone that has a little networking knowledge base. If you can figure out how to port forward and run a handful of command lines you can complete a pihole setup in an hour.
The chokepoint here would be the networking and RAM. Pi-hole isnt all that resource intensive but does use a bit of the network resources. Kodi, should run along with it but the performace as stated from other posters will leave a lot to be desired. The 2GB of RAM is not going to be powerful enough to do a lot. On the fly encoding for video is going to suffer by RAM, CPU and network output. Its possible to do it but youll definitely have to be patient with it.
Good tools are expensive and meant to last a lifetime, maybe more. A cheap tap and die set is a blessing for anodized sheet metal like in a computer case. Cheap materials, cheap tools.