Answer: AMI stands for Amazon Machine Image. It is effectively a snapshot of the root filesystem. Commodity hardware servers have bios that point the master boot record of the first block on a disk. A disk image though can sit anywhere physically on a disk, so Linux can boot from an arbitrary location on the EBS storage network. (e learning portal)
Build a new AMI by first spinning up and instance from a trusted AMI. Then adding packages and components as required. Be wary of putting sensitive data onto an AMI. For instance, your access credentials should be added to an instance after spinup. With a database, mount an outside volume that holds your MySQL data after spinup as well.