@Mark Barge The Performance and Scale doc covers many of the questions you have and would be an informative read to understand more about how Durable Functions work.
Firstly, to get more compute while still being elastic, you could simply upgrade to the Premium Plan which offers instances with more cores. Do note that there is a limit on how far you can scale-out per region. You can open a support request to increase these limits.
Next, considering that your requirement is compute intensive, it would be best to control concurrency to ensure only a few activities are running at the same time. There are Concurrency Throttles that you can setup at the host level (per instance).
With the above, you should be able to achieve optimum throughput and still ensure all queued requests are processed.
Another enhancement would be to leverage the Event Grid Trigger alternate instead of polling blob storage.