If you take coffee beans, roast them and grind them, you have ground coffee. Ideally, this is put into a coffee filter and then boiling hot water is run through, leaving you with coffee-flavored hot water, which people sometimes add cream or sugar to and drink as coffee, leaving the beans behind in the filter like you leave tea leaves in a tea bag and just drink the tea-flavored water.
Now, if you take that coffee-flavored water and remove all the water until you just have the flavor part left behind, that is instant coffee. Mix it with hot water again, and the coffee crystals dissolve and it becomes a sort of reconstituted coffee.
If you mix ground coffee beans with water, though, they do not dissolve, You just end up with a mess.
Whether one has more or less caffeine, depends on the beans both started out with or if they have been decaffeinated along the way. Preservatives, ditto. Health problems, well, again that depends on what you’re drinking.
I hope this helps. :)