Reading about and using the Amazon Web Services, I'm not really able to grasp how to use it correctly. Sorry about the long question:

I have a EC2 instance which mostly does the work of a web server (apache for file sharing and Tomcat with Play Framework for the web app). As it's a web server, the instance is running 24/7.

It just came to my attention that the data on the EC2 instance is non persistent. This means I lose my database and files if it's stopped. But I guess it also means my server settings and installed applications are lost as they are just files in the same way as the other data.

This means that I will either have to rewrite the whole app to use amazon CloudDB or write some code which stores the db on S3 and make my own AMI with the correct applications installed and configured. Or can this be quick-fixed by using EBS somehow?

My question is 1. is my understanding of aws is correct? and 2. is it's worth it? It could be a possibility to just set up a regular dedicated server where everything is persistent, as you would expect. Would love to have the scaleability of aws though..