Buffing is power sanding with extremely fine grits. If you are able to sand with the grain, the wood itself will not improve beyond about 400. Limiting factor being pore size and dispersal. If you're still cutting across the grain, you need to make shallower scratches or use a finish whose refractive index and thickness will hide the ones you have.
Now for the difference. If you press hard on the wood and drive the oil in, you can heat it and burnish the surface just as you can with hot sanding. Looks nice to the eye. Old boys used to burnish with shavings because they didn't have the inclination nor the materials to sand as we can. If you press hard and heat the finish, you can heat it until it flows, or even cut entirely through, forcing you to sand and start over. Solvent sanding recommended.
If you're into experimentation, lay some fine pumice in the piece with your oil or wax and power sand slowly with a cloth over your mandrel. Be generous with the oil or wax, as it is now a lubricant, used to maintain good cutting and minimum heating. Wipe thoroughly, then go to rottenstone.