Things I personally look for in an instance:

• An active admin that has a level head and seems like a good person (preferably multiple admins to prevent Bus factor)
• Instance runs a fairly recent version of Lemmy. If they run a very old version, that could be a sign of problems
• Is defederated with troll or drama filled instances
• Having a unique theme or vibe instead of being a general server is a big plus that makes it stand out, but not strictly necessary

I wonder what it is that an instance may offer over others

Here is a non-exhaustive list of things that I think are important when considering an instance:

• Stability — eg uptime, how quickly outages are addressed, etc.
• Speed and responsiveness — eg how quickly one can download resources from the instance, how quickly pages can load, etc.
• Accessibility of the admin(s) — eg how easy is it to get in touch with the instance admin(s)? are they open to communication?
• Cost sustainability — eg how is the instance funded? Is their model sustainable?
• Infrastructure sustainability — eg how is the instance powered? Is it in a stable location?
• Local Laws — ie what laws is the instance subject to?
• ToS — ie what rules does the instance impose on its users?
• Who is the instance federated and defederated with, and what is their criteria for federation?
• Other smaller things like ability to upload media, number of local communities, number of users, front-end/appearance, etc.