The primary incentive that comes to mind is improved availability. Often, instances can become slow, so I use another. By hosting a local instance I could always have a smooth experience.
Scores are federated, resulting in a consistent global feed across instances and a lack of uniqueness for each instance. I wish hosting an instance provided a more customized experience like this. It would be a great incentive.
No, you only see federated communities that someone on your instance has subscribed to. So at first there is nothing but you can theoretically see every post by subscribing to every community in every instance.