I think you sort of answer your own question when you wonder what the value of having tons of smaller instances versus a smaller number of larger ones as you discuss the stress of federation from the larger instances soon after. Similarly if content is split between multiple instances any single one going down is going to be less noticeable.

As for moderation, everything does not federate everywhere at once, there needs to be some interaction between the instances first (like subscriptions to communities) for things to really start transferring over. Yes, moderation will still take work, but you don’t have to address the entire fediverse at once.

As for

I already see wildly different numbers of comments on the same thread between the different instances depending on the home vs federated, with low usage (talking about <100 comments). It seems to take a long time for things to sync, and some comments don’t seem to sync.

I cannot say I would have explored the effects, so I can’t really comment on the topic. If the delays are significant and there’s straight up things not getting federated, that’d be an issue and should be fixed by the maintainers. Lemmy remains relatively new.