Most semi-current computers can definitely handle more than 360p, but if you have older hardware you may want to test a few varieties to see how your system performs. I typically use 720p or 1080p.
As for codecs, I use MP4 or DNxHD without problem. The most common today (unfortunately since it is not efficient) is MP4 (or H264), but here is the list of the current formats, assuming you have the new video engine: https://helpcenter.steinberg.de/hc/en-us/articles/115000808250-Video-support-in-Nuendo-Cubase-and-Dorico
FYI you need Cubase 9.0.30 or higher for the new video engine. The old engine uses Quicktime, and it has been deprecated since Apple no longer provides security patches. So Steinberg built a brand new engine in-house that avoids reliance on outside platforms like that.
However, the new engine has comparatively limited codecs and currently fewer features, which is a pain in the neck. MP4 works fine though, and if you upgrade to the Avid Codec license ($30 here: https://www.steinberg.net/en/shop/buy_product/sku/46740.html ) then you can also use DNxHD files.
Good luck – you’ll be fine. Cubase is very solid with video. If you’re using an older version of Cubase, especially on Windows, I’d strongly recommend you consider upgrading so that you can avoid the security issues of Quicktime.