Hi thanks for asking!
For this game I drew the parts of the spider separately all in Photoshop and then combined and animated them in Unity itself. You can create movement and squashing/stretching with the Unity animation system.
For Lo-Fi Room and most other things I usually draw lines on paper with brushpens + fineliners then scan them, convert them to pure black and white (threshold), then remove the white and add colour in Photoshop. I also add some overlays and stuff, but nothing too complicated.
I have a small Wacom intuos tablet (it's around 10 years old now) that I use for the digital colouring/drawing part. I think you can get a more modern one for around $50-$100. The more expensive version has bluetooth.
If you want to get into digital drawing you don't have to get photoshop, I think there are free/cheaper alternatives, it's just what I'm used to. I don't use a lot of the advanced features, I'm usually just drawing with flat colours with the pencil tool. For the backgrounds in this one I used a sponge brush I think, but I usually don't do too much with different types of brushes.
Procreate on an iPad is good if you have one already, Also for pixel art stuff I sometimes use Aseprite.
If you want to know more specifics, feel free to ask follow up questions~