The difference
A hot wallet is connected to the internet for daily use; a cold wallet stays offline for long-term storage. Hot is convenient, cold is safer.
A practical split
Keep only what you actively use in a hot wallet, and move long-term holdings to cold storage. If your hot wallet is ever compromised, your main funds stay untouched.
Habits that help
Use a separate wallet for risky new dapps, never hold your savings in the wallet you connect everywhere, and review approvals on your active wallet regularly.