There's no difference besides the storage capacity.
As the iPhone does not have an option to extend the memory after purchase, you have to choose the right amount of storage right from the beginning.
You can always manage how much space you use by manually choosing which data to sync (music, photos, movies, apps).
Generally more available space gives you the freedom of not having to manage your sync settings too much.
- 16GB should be fine for most people, especially if they are willing to make compromises regarding sync settings.
- 32GB is good if your like to take lots of photos or have a large music library.
- 64GB is good if you record HD movies which increase in size very quickly the longer you record.
The standard way of approaching these terms is to say that an "application" is a specific, static program on storage. It's some piece of code stored on a hard drive, a CD-ROM or elsewhere.
A "process" on the other hand is a specific instance of a running program. I.e. it is registered by the operating system as executing or being able to execute whenever the operating system feels like it.
If you take for example Calculator.app, it is a single application.
However you can have multiple Calculator processes if you start the program multiple times.
As chananelb wrote, it is also possible to have processes which are not "just" ordinary applications that have been started up. That could be for example kernel processes, or simply ordinary processes spawning up subprocesses to do specific tasks.
Regarding services, I chananelb's answer leads you in the wrong direction. His answer tells you about what is called a "Service" in Mac OS X... but you asked about what is called a "Service" in Windows.
The counterpart to a Windows Service is a Daemon on Mac OS X (and other Unix-derived systems).
Daemons are normally categorized by running in the "background", i.e. without direct user interaction through a graphical or non-graphical user interface. The distinction is a bit blurry though, as a Daemon might for example have a web interface for user interaction.
Daemons on Mac OS X are controlled by the launchd program, which is responsible for for example starting up daemons on boot, and letting the user start and stop daemons at request.
Best Answer
On OS X, Dropbox and iCloud keep local copies of all the files you have stored on them. The reasoning being that Macs usually don't want for space like iOS devices do. On iOS, Dropbox doesn't store the files locally until you try to do something with one, at which point it's downloaded. iCloud handling depends on the application. I know for some applications, the files are kept locally. Pages for example will download all available documents, seeing as how text files are typically not that large. I'm not certain about the rest.