At what point does a free game have too many ads?

Well, it really depends on the type of game. If the game in question is in the dark souls or roguelite/roguelike genre, it is not a good idea to implement ads due to the high difficulty of the games. If the game in question is a mobile game, ads are more acceptable, although if you add too many ads, no one will play the game long enough for you to make money or reach your target audience. Worse yet, you may annoy the audience you are trying to advertise to. A game with levels is good for ads because you can place ads between levels and give bonuses for watching ads before and during the level. Overall, advertising in games can be very good, but most importantly, do not put ads in a paid game, as the user has already paid to play and may perceive your ads in a negative way.

Where should I put ads and in-game purchases?

Usually in-between content, so the player does not get frustrated at having ads in the middle of fun play.

What is a good website to put your ads on?

Well, it depends, but usually, you want to put them on a website that is at least somewhat similar to what you are advertising.

When should I start advertising my business?

Whenever you feel is right! If you think your business needs advertising, then do it!