r a message, how common failures are and an acceptable delay time in case of a failure, what to do in case of a persistent failure, etc.

Streams are independent from consumer groups and acknowledged messages remain in the stream. xstream_set/3 can be used to limit the length of the stream, discarding the oldest messages. However, it is hard to give a sensible default. The required queue length depends on the the size of the messages, whether messages come in more or less randomly or in bursts (that cause the stream to grow for a while), available memory, how bad it is if some messages get lost, etc.