I found some sentences like "Most people work by day and sleep by night." Is it appropriate to use these sort of wordings like "sleep by night"? If so, what's difference between "sleep by night" and "sleep at night"?
I think "by" is sometimes used for literary effect, though I think "sleep at night" is by far the more correct of the two. "By" sometimes sounds cooler, e.g., "researcher by day, rockstar by night". This usage came into popularity with the internet for whatever reason. I see it on lots of profiles and personal descriptions online. That said, not sure if it is "correct". If you want a correct, although a bit boring/dry sounding, I think proper would be "Most people work during the day and sleep at night."
You can use "by" if the thing in question is a broad behaviour.
You use "at" if you're talking about a specific action.
fly at night (as in, take an airplane flight)
run at night (goes jogging at nighttime)
sleep at night
cry at night
recharge these batteries at night
and so on.
rockstar by night
fly by night (it means "have an unsettled life; move houses often")
Venice by night (enjoy, see, experience Venice during the night)
and so on.
Here's the best use in English of the latter ...