Nice overview but I'm not sure I completely agree with you on everything.
If I want to make a community, is there a reason I would choose one lemmy over another?
There's absolutely good reason to choose instances wisely when making a community. Some instances defederate from others, and you want to make your community somewhere where you agree with the moderation policy. Also, it might be easier to immediately reach people on a larger instance.
If you create your community on lemmy.ml, you might not reach everyone because some people and instances have blocked .ml due to different philosophies. If you make it on Beehaw, you'll reach fewer people as they have a higher moderation standard than most, which could of course also be good for your community. Lemmy.world is more neutral in their moderation policy, but I'm sure there are pros and cons there as well.
I like it when there are specific instances for specific niches, as it gives the community control over who to federate with. But of course, that's not always possible.
If I report a comment, is my report private?
They're not public at least. Few things on the Internet are truly private.