[in-proc] Backport log level changes and failure handling from #11100

[cjaliaga]

This PR backports the changes from #11100 that are relevant to in-proc:

• Changed logging levels from Error to Warning to better reflect the severity of the issues.
• Disabled the service when there's any failure (even if transient) as part of flushing logs, purging events, or executing a batch.

The rest of the changes in #11100 only apply to the OOP host and are not needed for in-proc.

resolves #11097

Pull request checklist

IMPORTANT: Currently, changes must be backported to the in-proc branch to be included in Core Tools and non-Flex deployments.

• Backporting to the in-proc branch is not required
  • Otherwise: Link to backporting PR
• My changes do not require documentation changes
  • Otherwise: Documentation issue linked to PR
• My changes should not be added to the release notes for the next release
  • Otherwise: I've added my notes to release_notes.md
• My changes do not need to be backported to a previous version
  • Otherwise: Backport tracked by issue/PR #issue_or_pr
• My changes do not require diagnostic events changes
  • Otherwise: I have added/updated all related diagnostic events and their documentation (Documentation issue linked to PR)
• I have added all required tests (Unit tests, E2E tests)