Basically, an application is a unit of measure for both memory and the “fair share” of both IO and CPU.
1 cell 128meg-ish - and, therefore, 8 cells will be 8 times larger (including not only memory, etc.).
An instance application is a server-based JVM (so if you have 3 instances that are 3 JVMs, if it is a Java application), but they are 3 instances of the same "size" JVM, so the cell is really size measure.
Pools are not connected to each other and only matter if you are going with dedicated plans and have to plan bandwidth (by default you can ignore this).
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