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Need broad brush guidance on web approach

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DISCLOSURE: I am not a web developer, but I've heard a lot of buzz words about web development
 
I have a client with small data needs for some very confidential information for his clients, which number around 3,500. For the past 20 years we have done everything on a small server located on-premises, to which only a handful of people have access. Much of the information we have been getting and storing has come from paper forms the clients complete and send in by snail mail, whereupon the data is keyed in to our WPF-based/SQL Server-backed system.
 
Times change and we now find it necessary to give his clients access to their own information via the web. They'll also be expected to provide updates via the web, rather than the paper forms of old. My client is paranoid about public web hosting and the thought of letting his data go off-site, but DOES NOT have the ability and/or resources to administer a web site locally on his own server.
 
So, down to the questions:
How feasible is it to use a public host for a web site to handle all the login/authorization stuff, and have that site retrieve the data from, and update the data on, our on-premises server?
How does one manage the tasks of 1) setting up several thousand users with secure login credentials, and 2) managing account lockouts/forgotten passwords/etc.?
What technologies would you advise using? ASP.Net & Azure, for example? What about SharePoint? Non-MS technologies?
What important questions am I not asking here?
 
Perhaps the biggest question: What important questions do I need to ask my client?
 
Thanks

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