What should my aspect ratio settings be for an Instagram ad?
It means that the ratio between the width and the height of the content (in pixels) should be the specified one.

Specifically, for a video you need to have an aspect ratio (technically, a DAR - display aspect ratio) of exactly 1:1, so the width of the video should be the same as the height of the video. In other words, the video should be square. As an example, 1000 pixels x 1000 pixels is fine, because (1000 / 1000) == 1.0, while 1280 x 720 is not, because the division is not 1.

For what they call "story media", the aspect ratio should not exceed 9:16 (which is 16:9 in vertical). In numbers, that's 0,5625. So in this case the "media" you're uploading shouldn't be exceeding that 0,5625 value, when calculating the ratio between the width and the height of the content.