I don't think they have the ux advantage that their wealth suggests due to misaligned incentives. A good portion of their investment is getting users to see as many ads as they will tolerate. Try to modify any privacy settings, for example, and the ux is as garbage as amazon.
Fediverse and self hosted, open source alternatives are still relatively new. Folks have to expect some turbulence. As things grow and more bug reports and contributions can be made, the ux could be superior because they can give users what they want instead of maximizing monetization.
Misskey is a federated facebook alternative I heard about on mastodon recently. I'm not too familiar with it myself, but seems worth mentioning.
It has a "groups" feature that might avoid the "instance per person" lemmy workaround you were thinking about. According to this comparison misskey doesn't have a like button, but a few of its forks do. Not sure about the upload experience; may depend on the app. I didn't see any clients listed on their site but did a quick search for an iOS app, which exists, so i assume android, too.
Sorry I don't have more info, but I hope that's useful. Best of luck! I'll be looking for a similar solution in the near future.