You can think of a DB Instance as a MySQL 5.1 environment in the cloud
with the compute and storage resources you specify. You can create and
delete DB Instances, define/refine infrastructure attributes of your
DB Instance(s), and control access and security via the AWS Management
Console, Amazon RDS APIs, and Command Line Tools. Multiple MySQL
databases can be created on a given DB Instance.
You can create databases using normal SQL commands, eg:
Yes, you can create multiple databases per instance, see their respective FAQ: What is a database instance (DB Instance)?
You can create databases using normal SQL commands, eg:
CREATE DATABASE <database_name>;