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Does this code have to be released under GPL license?
You never have to release something you write. If you do release it, however, if sounds like it should be released as gpl (but you can never say for sure in advance)
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What about if I am planning on hosting the service myself (no distribution), can I make this commercially available?
yes
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And if I did have to release it under GPL (which I really don't have a problem with) would I then have to make the source code available
to the public OR would I simply have to make it available to my clients, say, give them FTP to freely access the code.
Just to your clients. They, however, could distribute or modify.
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And if I did plan on releasing it as a product for sale, is that in violation of GPL?
No. Selling gpl'd software is totally acceptable.
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The code used to stitch together all these open source software packages might be modifications to their source code as well. Does this make a difference?
If it modifies gpl'd software then it would have to be gpl or another compatible license.
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Would it even be possible for me to release such a package and make it available to the public for free?
Yes.