The cache partition wipes non-critical system data. These are usually temporary files that will be built up again over time, similar to how internet browsers retain images in cache for faster loading times. System updates are often stored in the cache too. Wiping this keeps your personal files safe.
"Wipe data reset" will erase everything and you'll start over from scratch as if it is fresh from the manufacture. You will lose all user data, so anything you want to keep should be backed up beforehand. You may also need to verify your Google account info to be able to set the phone up again. This is a security feature that can not be bypassed.