Difference No:1 :
Website don't have project file. Web application have it.
Every single page of website will have its own assembly once its compiled. But in Web application entire project will be created as single assembly..
Now you will get an automatic question in your mind ? - When to choose Website and When Web app?
if you just want to create web sites and share with others then go for website
if you have any plans in migration with newer/older versions then use web application. Otherwise you may end up spending lot of time to exclude unwanted files from your web site folder.
if I want to make it more clear .. then..
if you are creating for your own purpose website/small projects in the organization then choose website.
bigger kind of projects go for web application. Hope its clear now.
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