Similar to the difference between a no-frills one-star hotel vs a full-service five-star one, a five-star airline generally offers a more pleasant experience with elevated service and much higher quality amenities.
These could be things like increased legroom and more comfortable seats, better quality food served during the flight, thoughtful touches like amenity kits even in economy. Airport perks include nicer lounges and friendlier staff. You may also find things like a more generous checked baggage allowance included with the ticket price or a frequent flyer program with better rewards.