You’ve seen for yourself that it does have a significant effect. You may not want the largest instance because that paints a big target on you. You also need to pick an instance with admins you can trust, or at least reconcile yourself to jumping ship to another instance if they do the wrong thing.
I started on lemmy.ml about a year before the reddit exodus. It was fine, and I didn’t use it much because there wasn’t much activity. I started using Lemmy more heavily when everyone came over… but at the same time, performance at lemmy.ml became horrible. They also disabled community creation because “(they) have enough communities.” What does that even mean? I still haven’t created any communities, but I would like to be able to if I choose to.
I ended up jumping ship to another instance I’m happy with so far… but I almost went to vlemmy first, which no longer exists. That would have had an affect on my experience.
If I were evaluating an instance today, I would start by scrolling to the bottom of the page to see what version they’re on. Is it the latest? That means the admins are engaged at least enough to keep the software updated. If not, you should probably move on. Are they on a pre-release version? If so, are you comfortable with a little instability to have bleeding edge features and fixes? Then, I would just poke around a little to see how performance is on the instance before creating an account. Is it acceptable? Read the server sidebar. Are you OK with the rules? Last, I would find the support or “meta” community for the instance. See what kinds of discussions are happening there. Are the mods and admins active and are they philosophically aligned with you? Are problems being fixed? What are the big announcements? Does the way the server is being managed make sense to you?