Okay I’m still a bit confused on what sponge is exactly. Is it a mod for a forge server that will create a plugin folder in the server directory and load them? Someone please clarify this for me. :3
Its a coremod for a forge server that loads plugins based on its API, thats right. But it does load these plugins from the mods folder, not a new plugin folder 
Here you go: https://docs.spongepowered.org/en/about/introduction.html
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To add on to this, Sponge (the mod) is as Blue described.
SpongeAPI is the API that the plugins use, SpongeVanilla is the twin sister project to Sponge (the mod) but runs without forge.
To add on to what @ryantheleach and @Blue said, SpongeCommon is shared code between the Forge and Vanilla implementation.
I feel like I’ve seen an identical question to this
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Take a look here too:
https://docs.spongepowered.org/en/about/faq.html
and here:
https://docs.spongepowered.org/en/contributing/index.html
Wow. Okay thanks a lot for replying, guys. Also thanks for clearing this up for me. I can now make a nodded 1.8 server that has plugins too! Yay! 
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