Hey there Mr Burton!
I run a website at https://fedi.tips which is full of info for beginners.
An instance is just another name for a server. It means the server or site you signed up on. In your case, your server is mastodon.social.
There are thousands of servers on here, all independent, and they sometimes offer different features to their users. Some of them offer much larger character limits.
You can move your account if you want to change servers.