If we have a volume that is still live after an instance is terminated(by disabling delete on terminate), can you attach that volume to a different instance during the time of instance creation?

If I am working for an enterprise(new start-up) we predicted that we will be having a custimer traffic of around 10,000/day.Our start up is a quick commerce website like zepto/blinkit.

As I am new to the business and don't have much capital to invest.What would be the cost effective AWS EC2 instance service that I can opt for my business

On-demand instances would be the cost-effective option, since it is reliable, has no upfront payment, and can be scaled according to your traffic needs later.
Also using multiple servers located in different availability zones within the same region can ensure uninterrupted operation even if some complications arise in one of the AZ's.
As, you later learn workload patterns, the server instance types and pricing models can be optimized later.

Instead of IIS is there any other third web server software that can be integrated as well and also available as well?

Yes, there are many third party webserver softwares that can be installed manually in the cloud. Some examples are Nginx, Apache Tomcat, Apache HTTP Server, etc.

if i have purchased 50GB of cloud storage and if 90% of it is utilized can we automatically buy additional 5 GB ( example)?

Yes, you can increase the volume by an additional 5 GB using the Modify Volume option in Actions for volume.

What is the best situation to run a spot instance

SPOT instances can be used when you already have an app running on a server, and you are expecting to need extra resources for a short amount of time, where the operation is non-critical, i.e it does not lead to failure with or without the spot instance.