Understanding the difference between websites and web applications is important for business owners who want a web presence.  Simply put a web application is a website with features that require additional programming and effort and would therefore take more time and money to create.   A website on the other hand is focused on just conveying business information.
One sign of a web application would be that users would actually login to the website and have personalized information.  For example an insurance company where you could login and look-up your explanation of benefits and yearly elections would be more than just a website.  This is a web application because it tracks users and user specific content.  Another example of a web application would be sites that sell a number of products.  Because there is tracking for users, shopping carts, payments, shipping etc this is a web application.
Websites on the other hand typically are there to convey information and provide simple mechanisms to contact the website owners.  An example of a straight-forward website would be a restaurant that is there to let people know about where they are located, menu items and current promotions.  These sites often have some advanced features like forms you can fill out to contact the owners, but are mostly content-centric.
If you are trying to get online with a new website, understand the delineation of an informational website and a more complicated web application.  If you have advanced needs for programming then consider saving money with online solutions that are pre-built and allow you to customize with your information and look and feel.  These pre-built web applications exist for all types of niches like Home Owners Associations, Membership Organizations, E-Commerce and more.  If your needs are most basic then consider a drag and drop website builder to create a great looking website yourself.  This a cost effective and easier than you might think.