I am also trying to wrap my head around this. Would this be an accurate (simplified) description for what you describe above:
Feature Service is a server providing access to the spatial data as raw data to be consumed by any GIS supporting WFS layers, while Feature Layer is ESRI Online providing one or more datasets in a grouping that have been symbolized/labelled/etc a specific way to be used in ESRI GIS's? In essence is a Feature Layer like an ArcPro layer file but can be for multiple datasets and it exists in ESRI Online?
Also, does a Feature Layer have to be hosted on ESRI's server or could it be hosted by an Enterprise local server?