Toughest Chess Server?

Is it just me or has ICC gotten much, much softer and less active over the past couple of years? Today, it seems like Lichess and Playchess have the best players. I've also heard that FIDE Online Arena has some extremely high quality rapid games.

What do you think? Where is the toughest blitz and classical (standard) pool of players at this point?

That entirely depends on the individual players. All the sights you mentioned have players that range from hanging pieces every few moves to top level GMs

Do people actually play in the FIDE Online Arena?

Yes. Of course, considering it's price and that it's actually rated games, the population is much lower than a free server. But yes, you can get games up to 45+10 rated pretty regularly if you're willing to sit 15-30 minutes (tops).