How does Multiplayer and game sharing work on consoles?

Hi! I know very little when it comes to consoles. I'd appreciate if someone here could clarify a couple of things for me. 1) If I borrow a disk from a friend, will I be able to play this game online? I gotta start over, correct? And I give the disk back, I will not be able to play. So the game must both be installed on your console and be inside the drive?

2) What If I buy a game digitally? Does this mean that it is inferior to a physical one?

Thanks in advance! I'll stay in this thread to discuss all this.