When you open the case, the light shows the charge status of the AirPods when they are inside the charging case. When you remove them, it shows the battery level of the charging case. Green light means they are fully charged and you do not need to charge immediately, while orange light means you need to charge them now.
Apart from the design difference - the biggest difference is AirPods are wireless while EarPods are not wireless. The AirPods comes with lot more openings compared to EarPods.
When you take any of the AirPods from the ear, it automatically pauses the music.
You can also double-tap on the stem to invoke Siri, and ask it to play/pause the music.
The AirPods will begin charging as soon as they are in the charging case. It does not make any difference, whether the case lid is open or close.
Look past their offbeat design and you'll find that Apple AirPods' compact size and high convenience factor are a winning combination.