The $ variables have been dropped from current ansible, they have been
deprecated for a loong time. The new way to do the host variables would be
writing plays like this:

hosts: "{{server_name}}"

and pass on the command line as before, there is some more advanced stuff
you can do now, like using --limit or doing this

hosts: "{{server_name|default('all')}}"


the ssh config should be picked up normally, I still use it for some
bastion jump hosts w/o issues.
​

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