Duel: Non cluster aware APPLICATION vs SERVICE

Hey,

I need to solve another conundrum. Here are some beautiful pictures for all to behold:

Can somebody explain me in plain language- when do I use "App" vs "Service". It looks too easy, however I don't see a clear "fine line" between the two. Question time:

1) Is this true that in at least some instances one can go either app or service?

2) I understand my app must be installed first. Correct? 

3) Can I cluster this way (I guess "Service") AD CS, AD RMS, AD FS?

4) If there is a custom app- is it "service" or "app" and perhaps: why? why? why? :D

I need to draw the fine line between two of them. No general statements please. Let the experience speak! 

Thanks a lot. God bless.