The other commenter is correct but to add to number 3: there is not much difference to them now, but a lot of instances usually have a particular "flavor" to them. Like one might be more geared towards people who are interested I'm programming, others are leftist instances, others are geared towards furries, or music interests.. but that's very broad and you don't HAVE to choose an instance based on that. A lot of new instances have cropped up that are just "catch all" instances for the surge of reddit users. Look at the sidebar descriptions to see if there are any specifics to the instance and see what you vibe with.
In terms of functionality they work exactly the same
Honestly I'm pretty much on the same boat as you and I feel like the frenzy is overblown, especially right now with the huge influx of people from a platform that by and large has some pretty lib takes. Some examples that people have given are their unwavering support of China, Russia, North Korea and denial about tianenman Square. I kinda side eye people who don't have nuanced takes about North Korea or any of those places for that matter. I am also hard pressed to think that people eho specifically identify as ML's wouldnt do their research, but of course there are all kinds. I am curious what specifically has been done and said that warrants hate speech on there to make it such a big deal. But yeah it's not like people are screaming "LETS GENOCIDE PEOPLE!!!". Idk