>What are the differences between pleroma instances like shitposter.club VS anime.website?
Each instance has its own set of rules and moderators, similarly to how different boards on 8chan or imageboards on the webring have their own rules and staff. These instances can "federate" with any other instance that hasn't actively blocked them, that is, users with an account on site A can see posts from site B in their feeds and interact with them without needing an account on site B, similarly to how you can send an email from gmail.com to outlook.com.
>I assumed most instances served the same content as they would all be federated with each other, but that doesn't seem to be the case. So I wonder if certain instances are more federated and therefore reach a much wider audience than others.
That's the norm for most instances. Sites with common topics federate with each other in order to increase their overall activity, and in case of general purpose instances like shitposter.club and anime.website they federate with almost anyone who doesn't hate them (they only blacklists instances with too much spam or malicious behavior).
Mastodon and Pleroma are the technologies that let people host their own site (called here instance). A site using any of these technologies can "federate" with another site that uses them, creating a network of websites that interact with each other in many different ways. Baraag and Pawoo use the Mastodon framework, while shitposter.club and anime.website use the Pleroma framework, and since both frameworks use the same protocols sites using them can peer to each other without problem.
Aside from Mastodon and Pleroma, there are other frameworks for federated networks of different kinds. There's PeerTube for video sharing and streaming (like Youtube or Vimeo), Lemmy for news aggregators (like Reddit), Pixelfed for image sharing (like Instagram), etc.