question

1) Does the registered game server act as one room or it can run multiple rooms

This will depends on your design. Each game instance is a lobby with a unique LobbyId. The lobby can only have one room but it can also have multiple rooms.

2) What is the difference between DeregisterGame and SetGameServerInstanceState

As the documentation said, DeregisterGame is used to notify the PlayFab Matchmaker that your server is going away. And your server will be removed from the Matchmaker registry after this call. We should call this method when the server is shutting down.

SetGameServerInstanceState is used to close a game session to matchmaking despite technically having slots available. For instance, a team game where you need to disallow join-in-progress to prevent cheating.

3) In the "Using externally hosted game servers with PlayFab" I can't find how it connects with my title id

You will need to call PlayFab APIs in your server like RegisterGame, RefreshGameServerInstanceHeartbeat and so on. These are server APIs and you will need to set title Id and provide title secret key to make them work and this is how your game server connects with your title Id.