Hi Erin,
Instances are the number of times a variable was defined in an image request whereas Occurrences are the total number of hits a variable value was either defined or (for conversion variables) persisted. The metric is in essence the sum of page views and page events.
Occurrences higher than Instances is expected for conversion variables, as occurrences also includes the number of times the variable was defined (instances).
I hope that helps.
TM