The backup options vary. The Windows Easy Transfer will back up user files and program settings. The Backup & Restore options allow you to backup specifics user files, designated folders for a periodic or continual incremental backup. Or the ability to take a snapshot of the entire drive.
You can also add other drives in as well for a full system image but requiring a great deal of drive space, removable media, or the best place a network backup. For that however you will want everything working in the best possible order when going to create a full image. Having more then one over time can also be a good predisaster plan.
As for restore points that mainly a snapshot of the registry for a fast roll back to a certain after something new has been put on or an automatic point was created. That's mainly used when an update or new program runs into a problem. If other problems are present and more severe a repair of Windows (
upgrade to repair install) or even fresh install may end up being needed if you lack a full image to restore.
A limited backup on the other hand is restored once a fresh copy of Windows goes on Then you are simply restoring files and folders onto a copy of Windows with a brand new registry all over again.
With restore points however those are best when the most recent and with any drive change and space to use setting change fresh points would be needed since the older ones will soon become obsolete after a certain amount of time. In fact turning off the system restore feature will automatically delete all points old and latest to start off again with brand new points when everything is in peak condition.