Wi-Fi Adapter = Wi-Fi connection adapting capability of tablet.
Using it, you can connect with an existing Wi-Fi hotspot (which broadcasts the network).
Wi-Fi Hotspot = Wi-Fi connection broadcasting capability of tablet.
Using it, you can create a portable virtual hotspot similar to Wi-Fi routers which other devices can connect to.
Unfortunately, when hotspot is turned on, Wi-Fi adapter is turned off. So, the device can't be used as Wi-Fi Repeater.
What're the uses of Wi-Fi hotspot in tablet?
Share mobile internet connection if your tablet has GSM, WCDMA, LTE etc capabilities.
Share mobile broadband gained by USB dongle attached with the tablet.
Share files and folders.
Share other networking services to enjoy multiplayer gaming etc.