Later talks about a time. "I will meet you later." Latter is used when you have a two or more suggestions and you choose the last option. "Do you want water or milk? I'll have the latter."

Yes, there's a big different. Former and latter. Earlier and later. That's the difference.

Actually quite a lot. For example, you'll never say "I'll meet you latter". Also, you could only say "I chose the later option" if time were involved. It's really worth checking the dictionary for this one.