K8y but is it more private?
Firstly, as far as I know, it's not more private than using sandboxed Google Play with a Google account you create dedicated for it. Aurora may also serve you apps or versions of apps that aren't intended for you because of using a shared Google account. Secondly, the security risk of getting rogue apps from Aurora isn't worth any supposed privacy benefit.
K8y Specifically does it sandbox the apps you download from Aurora, or do only sandboxed apps come from GOS Google Play?
It's not the app stores that sandbox apps on GrapheneOS, it's GrapheneOS which sandboxes all of your apps on it. Plain Android and Apple's iOS also sandbox all apps on them.
K8y My concern with Google Play downloaded apps is that they are all tied to the one account you must use to download the apps.
And so if I download my Instagram & others with my name as well as Signal app for secret chats, they all can be tied together and back to my Google Play account.
The fact that Google could know you use Signal doesn't let them know which Signal user you are. Also the chats on Signal are nonetheless encrypted end-to-end and Google shouldn't get the key to decrypt them. Although, the official Signal app incorporates within it code from Google; you may want to consider using the "FOSS" version of Molly instead (EDIT: I don't recommend getting Molly-FOSS from F-Droid as their website suggests, instead go to the built-in GrapheneOS App Store and install Accrescent, then open Accrescent and install Molly-FOSS). Molly connects to the Signal service and can cross-communicate with contacts who have Signal instead of Molly.
Instagram isn't private because its parent company does terrible things to their users' privacy, so I'm not sure that Google knowing you use Instagram is such a scary thing?
K8y Whereas with Aurora they would not, but rather be decentralized, correct?
Centralization/decentralization is a property of the service itself and doesn't depend on whether you installed their app from a certain source. Both Signal/Molly (again, Molly connects to the Signal service) and Instagram are centralized services. There's decentralized alternatives though, and there's many forms of how a decentralized service could look like. You can use a site like AlternativeTo.net to look for alternatives.