Some real examples, to expand on the definitions:
Flight Levels, in hundreds of feet (e.g. FL100 is 10,000 feet above a standard level) is used mainly for aircraft en route - all will have the same altimeter setting and a difference in FL will 'guarantee' a difference in vertical position.
Other measurements will be more concerned with avoiding hitting the ground (unless landing!) - and for this the altimeter will be set to show the height above the airfield, or the altitude above mean sea level. Both of these are based on the actual atmospheric pressure at the airfield or for the area.
That's a very simple explanation, and deliberately so - I'm happy to be corrected by experts, but please remember the OP's request and keep it simple
