Port forwarding is used when you want to access a service running by some private network machine from an outside network(public network).
For example, in your work environment, there may be a development server that has its own privte IP address ,any one can access it from the inside, but no one can from an outside network.
What if someone wants to to access it from an outside network, (working at home)?
Port forwarding solves that problem. You can configure your router to forward all incoming packet on x port to xip:xport destination.
Difference between SSH and Telnet:
1. SSH uses port no 22 & telnet uses port no 23
2. SSH and Telnet commonly serves the same purpose
3. SSH is more secure compared to Telnet
4. SSH encrypts the data while Telnet sends data in plain text
5. SSH uses a public key for authentication while Telnet does not use any authentication
6. SSH adds a bit more overhead to the bandwidth compared to Telnet