Well, an OTA is usually an incremental upgrade... it'll update only needs to be updated and that's all. They are often very specific to the build you are currently on... that's why on some phones, when you take them out of the box, they will go through like 3 or 4 smaller updates rather than one large update.
A factory image is a little bit different as it reloads the entire system image. By default, this usually means all your user data and stuff crammed into your internal storage are wiped as well. But you can tell the process to leave your user data be and just wipe and reload the system images....
Loading a factory image usually means you end up with the 'cleanest' build since it wipes your system level partitions clean. And if you've reloaded things a million times, even a ground up installation/configuration (where you reload the apps, etc) is no big deal.

Once you have the environment set up on a computer and get comfortable with the steps, its easy.
The OTA is usually the easiest because it, well, comes 'over the air'. You can also load the OTA update manually via recovery. But the amount of effort it takes loading the OTA manually is nearly identical to loading the full system image (and in some cases, like a full version upgrade, the OTA file is nearly the same size as the full factory image).