Diffuse shading is one of the most common looks in rendering and diffuse objects are often dry and unpolished such as newspaper, dirt, and rocks, and is often the base of many materials.
These objects all reflect light in a wide range of directions from the surface. This means they won't be shiny or reflective, which requires something like LamaConductor to add shininess and reflectivity.
Color is typically where textures or patterns are connected to create color for opaque objects. This is where a wood color texture would go, for example.
Diffuse roughness is how you would simulate a powdery surface like dried clay or dust. When roughness is 0.0, LamaDiffuse uses the Lambertian model to calculate the diffuse response. When roughness is > 0.0, the Oren Nayar model is used instead.
Normal / Bump
Here is where you supply a signal, either a texture or procedural pattern, to create a bump to the surface to "fake" surface details like small bumps or scratches. This means an artist doesn't have to model these tedious and often repetitious parts of a model.