How can I generate addresses for all altcoins? I want to develop my own exchange website having all the altcoins addresses. I am doing research from past few days and I came to know that I need a copy software client of all the altcoins, and then address can be generated by making rpc calls to these clients.

Do i need to setup these clients on my server (i.e VPS, AWS etc)?

If yes ? then what would be the best server configuration to handle the exchange and do I have to download these client one by one and then implement each ?

If no then how can I implement this ?

Currently I am running a bitcoin client on vps.
You don't have to just create addresses. You have to track what's happening on each network and make sure that you actually have received funds before you can credit deposits to your customers' accounts. There are easier ways to just create addresses, but you would very much want to run at least one full node of each network under your own supervision to track the networks.