1. What is the difference between Raspbian Stretch with Desktop vs Raspbian Stretch Lite

Desktop versions have a graphical user interface

Lite versions have NO graphical user interface.

2. What is this error message and is there a way I can correct it?

Is answered by @Aurora0001

3. Is there a way to add the desktop display after installing lite initially?

Is answered by @bobstro in the comments:

4. Has anyone else noticed issues with this installation?

See 2. answer

The error ---[end Kechallengernel panic - not syncing: VFS: Unable to mount root fs unknown-block(179,7) random: crng init done

is often mentioned when a corrupt image have been transferred to a SD card or when a SD card is faulty or kernel bugs.

I have replaced a corrupt SD card due to this cause and that solved my challenge.