Hi Jimmy,
The number of instances is the number of threads used per treelikelihood, while the number of threads is the maximum number of threads used at the same time. For StarBeast3 analyses, it is usually more efficient to have just 1 instance per treelikelihood. When using more instances the individual instance threads just gets in the way of running multiple threads for sampling individual gene trees.
However, from what you describe, just having 1 instance is not helping getting more CPU usage, so I am not quite sure what is holding things up. If you can make the XML available, I can investigate further and see why there is not much multi-threading happening.
Cheers, Remco