I've taken to skipping terokkar lately and don't miss it a bit. I do:

Hellfire (usually hit 62-63 before I leave here, including having run ramps and blood furnace for the quest completions).
Zangar (usually 64-65 before leaving, including slave pens and underbog quests)
Nagrand (do the ring of blood ASAP for the nifty weapon)
Blade's Edge (I skip the wyrmcult nets/whelps quests but do the rest)
Then it's a toss-up between shadowmoon and netherstorm if I haven't already hit 69/70. Roughly similar gear upgrades either spot. More faction (from signets) for scryers in netherstorm, and aldor in shadowmoon from what I've been able to tell.

As to whether instance grinding is better than questing, whichever bores you the most. Your group is kinda squishy in instances so quests might be the faster option. Grinding instances is mind-numbingly boring for me so I just run 'em for the quests and then go back to normal questing. The trick to grinding is stamina (i.e.: not gouging your eyes out with a spoon from boredom). The trick to questing is knowing what areas/quests to skip collections in. A tough choice, to be sure.