It's perfectly possible as long as you mix the classes to have 1 tank, 1 healer and 3 dps. You will also need 5 HB licenses.
Dungeonbuddy config:
Tank:
Party mode: Leader
Party member names: input names of your dps and healer here
Set to queue for random or specific
DPS + Healer:
Party mode: Follower
Leader Name: input tank leader name here
As for looting I prefer to only have 1 toon (a dps) set to loot all, others set loot to bosses only. That way you will still get all the greens/blues, but skip a good amount of gray/white loot.
In the CR you use (most likely Singular) make sure targetting is set to 'None' and movement to 'Auto'.
Also make sure you enable Autoequip plugin or you won't get far as you won't get any gear upgrades.
I'm not sure about the current state of lowbie dungeons, some may give problems. Overall it's good to supervise the bot from time to time.