What is the difference between instance name and instance id in SQL Server?

INSTANCE NAME = Is attached to a SERVER NAME just like the way it's stated. When you try to connect to an SQL Database you need the server to be able to get in. It's all about the networking and properties of your Physical or Virtual machine hosting your DATABASE.

INSTANCE ID = Is attached to SQL Instance Name. Once you provided the instance name which is the PATH to your SERVER NAME then you need the INSTANCE ID to be able to get into your programs and DATABASE path and all other software licensing requirements to run.

One is Physical or Virtual Computer and Network and the other is physical or logical path to the database storage.

SQL server instance name  SQL Server instance-name is a way to define a specific instance for a particular type of section. For example, the client section is used to define information about a client. When multiple clients are defined, they are distinguished by their instance-name . The same instance-name applies to modules.