When creating an Exclusion or a Suppression List why would you use one over the other? I believe one of the differences is Exclusions are Data Extensions and Suppression Lists are Lists, so different objects. Is this correct? Are there any other differences?
The suppression lists differ from exclusion lists, although the filtering logic at send time is the same. Exclusion lists are subscribers who have a status (active, bounced, held, unsubscribed) and who may want to continue receiving messages and A suppression list is a list of subscribers that you don't want to receive your communications.
Building on your first point, exclusion 'lists' can actually be Lists, Groups, Data Extensions, etc. which makes them quite convenient. Suppression Lists are their own beast based on list architecture, and from my experience are quite buggy (in terms of the UI at least).
Why use suppression lists then? Because for some things you have to. Triggered emails and Journey Builder can't use exclusion lists, although the new additions of domain exclusions and exclusion scripts could be used in their place
If you look at the documentation itself it mentions:
"You choose a publication list when sending email messages and SMS messages to a sendable data extension. Suppression lists are used with guided sends, user-initiated and triggered email sends."
Their documentation further goes on to say:
"Examples of the types of addresses included on a suppression list are addresses with a history of spam complaints, unsubscribe lists from previous providers or advertisers, addresses of your competitors, and canceled customers."
I can't explain why you wouldn't just add those people as unsubscribed users into your 'All Subscribers' list - Perhaps to keep a 'clean' Subscriber List? Or for that matter why 'Guided Sends' have an association to Suppression Lists. Perhaps it served a purpose long ago, or was intended for certain uses, but it does seem as though Suppression Lists are outdated and may even be phased out eventually (hopefully).
Maybe somebody else has there has insight I'm not privy too, but this is the impression I have!
I have never needed to use a suppression list, and rather stick to using either publication lists (for Data Extension send unsubscribe statuses) or exclusion Data Extensions.
In fact, I would hardly suggest publication lists as a way of managing unsubscribe statuses purely because it's so easy to forget to select it from the User Initiated Send interface. Exclusion lists/Data Extensions are far easier to work with in my opinion.