FBX or Blend?

Is there a difference between the .blend and .fbx models?

Not really aside from space required on disk.
Mind you however that .blend is a blender extensions, and as such it can be opened in blender only and would probably require external plugins on different applications, while FBX is a more “universal” (it’s actually a proprietary file owned by Autodesk), and you can open it with pretty much whatever you want.

From what I understand, when you import a .blend file in to Unity, Unity actually invokes Blender’s fbx export module to export the .blend file to an .fbx behind-the-scenes.