I'm not the person you're asking to, but I failed at the "choose a server" part. I started having a bunch of questions over the choice of server and then gave up from analysis paralysis.
What are the implications of choosing one server over the other? Does this affect search and discoverability in between servers? If I really like Baking and really like Fencing as well, should I join the "Matodon Baking" server, the "Fencing fans" server of a neutral one? If I choose the Fencing server, will the people on the Baking server start seeing me as some sort of outsider since I'm not originally from the Baking server? Will they even be able to organically find me? How does the algorithm evaluate these choices? Can I restrict/split my posts between Baking, Fencing and general? And so on...
> What are the implications of choosing one server over the other?
Unless you choose a political or spam-friendly server - it doesn't matter.
> Does this affect search and discoverability in between servers?
A little.
> If I really like Baking and really like Fencing as well, should I join the "Mastodon Baking" server, the "Fencing fans" server of a neutral one?
Shouldn't matter.
> Will the people on the Baking server start seeing me as some sort of outsider.
Never seen anything like this, but I can imagine if you choose a server associated with 'A' and leave a comment in a server where people hate 'A', they might have a prejudice against you, so it's better to choose a very neutral, general server.
> Can I restrict/split my posts between Baking, Fencing and general?
Use tags.
> How does the algorithm evaluate these choices?
There's no algorithm, you follow people you like and block people you don't like.
On mastodon you have three timelines/feeds: local, federated and global.
Local is for posts local to your instance. Federated is local + posts from other instances, from people that are followed by somebody on your instance. Global is for any posts from anyone.
For example: if you join art instance your local feed will be very artsy and federated feed will be slightly artsy.
It matters little, because most people use and subscribe to hashtags to discover posts. Federated feed is too random, especially in big instances.
I would suggest to pick one of the larger instances – they are stable and have been for a while. For example, I'm on mstnd.social. You can also go with the official mastadon.social, probably the simplest. hachyderm.io is also a popular one, especially with programmers.
