That's definitely true. And community moderators should consider at least trying to move their communities to smaller servers. Now that they've got some bigger subscriber numbers.
Not really. There are multiple instances which limits the chance. I assume some are able to access reddit too. Also, I've had more unreliability with Lemmy as its small servers and the code has often required restarts to fix issues.
What I mean is that since Lemmy is decentralized, the entire network can never be down. A few instances can be down, and your particular instance can be down, but the entirety of the network can never be down.