Hi @Anonymous,
I think the line is pretty clear, but perhaps it's because I know the platform and history... Here's my attempt to clarify:
CDS
All Dynamics 365 apps (e.g. Sales, Customer Service) are built on top of CDS, so CDS is the "base" or we can say the core of the system. CDS (as the previous person said) contains default out-of-the-box entities such as Account, Contact and all the other entities to support the common/core capabilities (e.g. Office integration, interaction/activity management, security, etc). The standard/core/base entities are also referred as Common Data Model (CDM) https://docs.microsoft.com/en-us/common-data-model/. As you build custom apps and functionality on top of CDS or when you install 1st/3rd party apps (e.g. Dynamics 365 Sales) you are essentially extending CDS and its data model (CDM).
CDS Model-Driven App vs Dynamics 365
A model-driven is simply an app where the forms and navigation is tightly coupled with the entity/data model. You configure the UI based on an existing enterprise scale "template" (model-driven) instead of starting from scratch like in canvas apps.
To further supplement as I described above, Dynamics 365 is built on top of CDS and so, there's no direct relation with model-driven apps. Out-of-the-box Dynamics 365 apps built their interface with with model-driven apps. You can have Dynamics 365 system and extend it with canvas or model-driven apps depending on what your requirements are.
Sandbox version Production environment
- Sandbox allows you more administrative tasks to be perform on it such as delete the environment whereas Production does not for obviously reasons.
- Production environment is more performant than Sandbox. There used to have no performance differences but it's no longer the case.
"dynamics" in URL
This is true, but has to do with the history of CDS and Dynamics 365 aka CRM. I won't get into the history not to confuse you. I hope Microsoft does remove that dynamics in the URL because it is confusing to users.
Hope this helps!