Could instant espresso be used as a sub for the coffee grounds? If so, how much?

From the instructions, substituting expresso powder would work and might be easier. I would start with adding 1/2tsp of espresso at a time until you get the flavor intensity that's a little bit stronger than what you like. Why a little stronger? Because this is an ice cream and the cold temperature along with the dairy is going to mute the flavor of the coffee a bit. So you'll want to make the coffee flavor more intense to compensate for this effect.