How do web servers allocate data for multiple hosts?

When a website is hosted as part of a webhosting package, all the files associated with that website are under a directory on a HD in the server. Am I correct so far? So, if I hosted another website, under the same package, my hosting company give me another directory (which I assume is on the same HD?) as part of the new website. Now, when information is requested from both websites at the same time, doesn't that mean that the server needs to load information from both sub-directories at the same time? So if 100 people access information from one website at the same time as 100 people access the other website, wouldn't it be faster to have the other website hosted somewhere else entirely??? Please explain how mulitple hosted sites on single hosting packages work (in terms of storage on server and data transfer) and is it better to host each separately? Thx in advance.
How do web servers allocate data for multiple hosts?
Its not just a matter of how many people are accessing your sites, keep in mind, there are other sites on the same drive too. It depends on how busy the entire server is! Until you are receiving 200 hits to your site at once, you are far from having to worry about speed. When you get to the point you have to worry because your site is in that much demand, your pockets should be overrun with cash and you can build your own server