How would you implement an online multi instance of dungeon game with character progression?

I think what you are looking for is a “Instance Matching Maker” ?!
Like in this game, that I played for a while, scroll to Instance match

http://tera.enmasse.com/game-guide/gameplay/groups

You have to make a ‘master server’ which will collect players that are looking to join an instanced map. Once the group is formed, the master server launches the new server process on demand and map travel the group to the new server instance…
This “matchmaker” stuff is very complicated, I have no idea how that work.