In this situation the guest not you should cancel, as they are the ones who have made the error. You need to call Airbnb as soon as possible and explain to them what happened they will be able to see the guest wanted to cancel. And should lift the blocked dates.
It sounds like you have set up your listing before reading up on how Airbnb works. Why not 'snooze' your listing while you read up on Airbnb Help Centre and the useful community guides and tutorials on this forum.
Instant Book isn't usually a good idea for new hosts. I would recommend you turn it off until you are more familiar with how Airbnb works.