1

We don't want same user to be logged in from multiple Systems. Can we restrict on number of instances the user logged in?

2

Take a look at this documentation, looks like you may have to enable transaction security policy

Note: As per docs to enable this feature

Requires purchasing Salesforce Shield or Salesforce Shield Event Monitoring add-on subscriptions.

https://help.salesforce.com/articleView?id=security_transactions_about.htm&type=0

Update:

This could be a better solution than the above mentioned route There is also this doc which provides solution using login flows

https://developer.salesforce.com/page/Concurrent-Sessions

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