In database architecture, the query processing involves an intermediate layer called DB proxy, which acts as a query engine to parse and route queries to different databases based on shard keys. A service called topology manages the physical and logical topology of the databases, including shard keys and tables. Using read replicas for load sharing ensures high availability and reliability by serving reads even if a primary database goes down. While the complex setup may initially impact performance, solutions like query caching in memory help optimize query parsing for efficient processing.