WiFi is a common thing now and isn’t the best term to explain whereas hotspot in networking is the place where the network is created. Wifi hotspot is the source that is providing WiFi access to other users that are connecting to the internet. It can be the router set up by ISP or by the users themselves or for mobile sources such as smartphones there are hotspot features that allow sharing of internet access.
WiFi hotspot that you probably come through in everyday life includes cafes, hotels, universities, etc that provide public WiFi. You see these WiFi spots by their SSIDs that are the names that you select to connect to that WiFi network.
Usually, a WiFi hotspot is set up using a router that is connected to ISP and its range depends on the router that is being used. Hotspot allows multiple devices to access the internet wirelessly over some distance.
It can be password protected network or some public places have public WiFi that is accessible without passwords. The control over this WiFi hotspot is completely within the administrator and can block users or hide the SSID. Access to services can be limited by the administrator easily without bothering anyone.
A WiFi hotspot works fine with multiple users but the more traffic on the WiFi network the slower the internet gets. Overcrowded WiFi networks may even be as good as being offline when the pages stop loading.
These hotspots are usually most useful in public places with a large number of people interacting through that place. In offices, employees are provided with such a WiFi hotspot that brings Internet access to the entire staff.
Places like schools and universities have a large number of students and in places like the library, the hotspot is set up for students to access the internet for study purposes.