Tried searching for an explanation of the +/- of these two options, but found nothing comparing them. Sorry if this is already explained somewhere? Can you point me there if it is? Thx.
I'm new to using File Collections. What are the differences between Members vs Sub-Collections? Why would you choose one over the other? From what I've understood so far, a Sub-Collection is the same as a Collection, ie you can collect different files/folders there also as virtual members? Is all there is to it?
Sub-Collections are collections that are below other collections. They aren't used that often, but you can use them to build a hierarchy of collections if you need one for some reason.
Collection Members are items (files or folders) that have been added to the list of things that are in the collection.
If you copy a folder to a collection you may be asked if you want to simply add it as a member, or turn the folder into a sub-collection which would list all the contents of the folder. In almost all cases, you just want to add it as a member. (You can change Preferences to always do that without asking, if you wish.)
They are indeed used often, at least by me and with more than one or two levels below the main collection 
One thing I find useful about sub-collections is that if you drag and drop multiple physical folders with the same name into the collection, and respond to the prompt that they should be treated as sub-collections rather than members, the parent collection will then contain one sub-collection with the merged contents of the physical folders.