@lucidfox rsync + encryption has file path length limitations i.e if your app has a file which has long path (not just the file name, maybe it is some 10 folders deep) the backup will error. The limitations are documented here https://docs.cloudron.io/backups/#encryption .
I've moved the backup directories from /var/backups/ to my external drive. If I want to restore from those backup directories, do I need the contents of the /var/backups/snapshot directory also?
The snapshot directory is not required for restoring. BUT it's required for the actual the backups to work (so think of it as a working directory for backups). It's important to not remove that directory when doing backups! Since, Cloudron will use hard links from the actual backups to the snapshot directory, it's not really taking up extra space.