you can work around Cubase limitations a bit. You can create a chain of tracks… Host an instrument plugin version of a midi VST plugin… then create a secondary track which takes its input from the output of that plugin. You have to enable the monitoring icon of the second track so that you can select the first track that is feeding your VST midi plugin to take input from your midi keyboard.
you can also use third party subhoster like KushView Element in the instrument slot of a cubase track, then use all the VST midi plugins you want inside that.
VST3 and VST2 can both handle midi plugin tasks, despite Steinberg not wanting to officially support it. VST2 has more flexibility for a few specific issues which can’t be done properly in VST3, but many common midi tasks can be done with VST3 plugins also.