I mean with federation it shouldn't matter which instance people sign up on. I think largely they should pick smaller ones which might be local to them, or they know their admins, or based on the admin's rules and approach to running an instance. The "subscription pending" thing is actually a Lemmy UI bug, you should actually be subscribed despite the UI, I think it's this bug report which covers it.

Federation works based on a push model where new posts are pushed to the servers it federates with, so the speed will largely depend on the local instance, which should be caching the posts and comments, not the remote instance.