communities are exactly like subreddits but instances are servers run by different individuals, think of them as small reddits but all able to talk to each other, that is why it is called federated
Yup! Those websites are the instances which are the infrastructure and interface by which you can access communities - each of which is hosted on a specific instance. An instance is essentially the collection of all the communities it hosts and all of the users signed up through that instance.
Browsing All shows posts from all communities that have previously been interacted with by a user from your own instance. So if someone from Lemmy.fmhy.ml subscribes to an obscure community on some other instance, that community is added to your All view, but it wouldn’t show up before then.
"All" is essentially all instances, but it uses a bit of a completed formula of doing it from what I hear. Other people have explained it so I won't. If you registered on a reasonably sized instance I imagine it effectively works out to "all" instances (for hot anyway, maybe not new).