Hide means remove from view. It does no more. It is not secure. It is not a way of hiding material you might not like others to see. It does, however, mean you can hide from view the first two frames that are a bit blurry before you captured the good one.
Remove means remove it from this album. An album is an ad hoc collection of photos, and you decide you don't want this included in the album, but still want the shot in the Library, that's when you remove a shot
Delete means remove from the Library to the trash, and when the trash is emptied it's gone forever. There is no trace of this image in the library.
In the case of a referenced library (where you store the files externally, as you put it) none of this has any effect on the original files. One of the unfortunate weaknesses of Photos is that, in referenced mode, it is pitifully lacking any kind of file management tools, and the principal reason experienced users recommend against using the app in that way.