Do I need to create a hosted zone in Route 53 for each domain even if all domains point to same EC2 Instance?

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I was wondering if it's necessary to create multiple hosted zones for each domain or can I just use one hosted zone for all domains and simply change the A record for each.

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You'll need a hosted zone for each top-level domain (TLD). So, if you have domain1.com and domain2.com, you'll need 2 hosted zones. However, if you have subdomains: domain1.com and sub.domain1.com, you could combine those. Externally, you'll need a zone for each base domain.