What is the difference between sending a mail to a recipient list compared to sending individual mails via a dynamic loop?

Performance. Sending 1 mail to 20 recipients will cost considerably less performance than sending 20 individual mails. If the mail is sent as a SAP Office mail (as opposed to e-mail, fax...) disk space will also be a factor because the SAP office mail will only exist once in the database, with references being created for each of the recipients.

The only time you need to consider individual mails with a dynamic loop is when the text of the mail varies from one recipient to another.