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How will lemmy instances survive if they get too big?
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Not as big of an issue as you'd think. In 2015, the entirety of Reddit could be archived using ~2TB of storage space. Keep in mind that this is the size when saving everything as uncompressed JSON, so the actual DB size would have been even smaller than this!
You're much more likely to see this DDOS-like effect coming from ActivityPub traffic volume. High activity = Lots of messages = Lots of processing demand. As the Fediverse grows, the baseline processing power necessary just to keep a small instance afloat will steadily rise, but it's not yet clear how big of an issue this will actually be.
We already saw a pretty major rash of Lemmy instances getting overwhelmed back on July 1st, but a lot of that bottlenecking was caused by quirks specific to Lemmy (which can be ironed out) rather than overhead inherent to the ActivityPub protocol itself (which, to be fair, is still relatively heavy).