@Peter Thurwachter (MINDTREE LIMITED) ,
Thank you for reaching out.
Based on your questions above.
Compared to the cost of manually setting Instance count to 1, would it be cheaper to set auto-scale to 0-1?
It will be cheaper if autoscaling is enabled and set the minimum instance count to 0. This explained in Example 3 (b) and Example 3 (c) here. In manual scaling 1 instance (10 Capacity units) will be always reserved and will be charged and in autoscaling the instance will be added and removed as per the traffic flowing through your application gateway.
Also, we wish to know what the upper limit of the instance count is
You can add up to 125 instances. This is currently documented here.
From the Resource usage amount, how can one figure out what % of the reserved capacity is being utilized.
Currently I think you can get an estimate on this by using Azure Application Gateway Metrics like Current capacity units, as each instance guarantees minimum of 10 capacity units in terms of processing capability. You can get the estimate on number on instances in use. From billing perspective you can take a look at Estimated Billed Capacity units metric as well.
Additional references: https://learn.microsoft.com/en-us/azure/application-gateway/high-traffic-support
Hope this Helps!