I actually have now figured out the issue, like you said, the server was not powerful enough, specfically there were too many mobs close, that made the server lag. TP-ing to antoher location fixed the issue, but I still get the error message when stopping the server, but I am going to open a new ticket for that.
Also, how come the server isnt strong enough, but I have 5G RAM allocated and only a max of 1-2G is ever actually used?