What is the difference between "customization" and "Configuration"?

Very simply customizations are code changes which are made within the build place, these changes can then be used to generate deliveries which can be deployed into the Use Place.
Configurations are changes which are made via the Aurena client through the Use Place typically in the Config environment they can then be transferred to other Use Place environments.

We would recommend reviewing the Tailoring Guide for further details on this as well as this article