Hi, sorry for the late response. You don't need an account on another instance unless you want to interact with people on that instance and you want to use that specific account. I believe you can also use another account on a seperate instance as long as the two instances are federated with each other.
People tend to have multiple accounts on multiple instances because some instances arent federated with each other and thus you don't get the full experience. Take for example Beehaw and lemmy.world. If you have an account with Beehaw the only way to see lemmy.world posts is to have a lemmy.world account or an account on an instance that is federated with world or vice versa.
Another more obvious reason is that since instances are generally privately hosted servers it'd be wiser to have accounts on multiple different instances as opposed to one because things happen and server outages are possible.