Learn Russian: Этот проект гораздо больше, зато он устроит всех. - This project is much bigger, but on the other hand it will suit everyone.

You could, but you would lose the sense of compensation. While но just means 'but', зато translates closer to 'but on the other hand' or 'but to make up for it'. It shows that the second part of the sentence (suiting everyone) is a positive trade-off for the drawback mentioned in the first part (the project being much bigger).

Why do we use гораздо here instead of очень?

In Russian, you cannot use очень (very) directly with a comparative adjective like больше (bigger). To say 'much bigger' or 'a lot bigger', you must use the adverb гораздо before the comparative form.

What tense is устроит?

It is in the future tense. It comes from the perfective verb устроить, which can mean 'to arrange' or 'to organize'. In this context, when used with people as the object, it means 'to suit' or 'to be convenient for'. Because it is a perfective verb, its present-tense-looking conjugation (устроит) actually carries a future meaning: 'it will suit'.

Why is 'everyone' written as всех instead of все?