Hi Glen,
Project group together all the artifacts related to the application development. In a basic project you can have files and folders to advanced projects that can be used for builds, version management, resource maintenance etc., A project type ensures only necessary libraries for type of development objects are imported. HANA Studio is based on open source eclipse that can be used for a variety of SAP and non-SAP related development projects. Specifically talking about SAP & HANA development, there are other project types for example SAP UI5 development, WebDynpro development, BW development, ABAP development. Majority of HANA development uses XS Project.
HTH
Gopal