When should you use a custom object instead of a standard object, and what are the key schema limits?

Use standard objects when the built-in object (Account, Contact, Opportunity, Case, etc.) matches your business concept. Standard objects come with pre-built functionality (standard fields, list views, reports, AppExchange integrations, Sales Cloud and Service Cloud features). Extending a standard object with custom fields is always preferred over creating a parallel custom object.
Use custom objects when no standard object accurately represents the data entity (e.g., a Project, an Event, an Asset under management) or when overloading a standard object would create a confusing data model.
Key schema limits:
— 800 custom fields per object (varies by org edition)
— 25 relationship fields (lookup + master-detail combined) per object
— 2 master-detail relationships per object
— Maximum 200 custom objects per Salesforce org (Developer Edition), up to 2,000 in Enterprise/Unlimited
— 25 rollup summary fields per master-detail parent object