1. Yes, that's how federation works. Your local host may be faster than the instance you are browsing content on, especially if that other instance is getting hugged to death or DDOSed. But even if that is happening, the rest of the Fediverse works just fine.

2. No, instances are not mirrored. That's probably possible in activitypub (the protocol that Lemmy and similar Fediverse platforms use), but unlikely to happen due to server resources and funding.

Think of it as a bunch of forums on the Internet, where an account made on one forum allows you to comment and see content on other forums, but you don't need a separate account for all of them. Federation somewhat simplifies things, but there are drawbacks that I won't get into here.

Not an expert: On site loading no, but on propagating data across the fediverse yes, which is much more subtle. On my instance performance is great!

There will just be less posts, comments, voting than usual

Comments/posts will federate much slower or even fail if theres alot of load on the other instances. Everything accessed from your instance is already federated and the content is located on your instance by that point, except for images