That's a double-edged knife. yes it feels closer and personal, but it also breeds inside groups and cliques. I've been turned away from multiple forums because I was too ASD to fit in with their culture but there was no other space to discuss it. And this can go much much worse than just a culture-fit. Not to mention that if that forum becomes too popular, that culture is anyway lost.

However using lemmy there's the best of both worlds. You can still keep your instance small enough so that you know your local users, but also be able to interact with the larger community without the extra effort I explained. For example there's instances out there like beehaw and hexbear which through have managed to retain their own culture and standards even while federated.