Understanding Groups vs Team Sites, need help

let me try to answer your questions as well: Is there a difference between team sites and group sites going forward? Are groups just replacing teams? there is no replacement but very often Office 365 groups give you more functionality as you get a Mailbox, calendar, Teamsite, Planner and other topics around that. I learned from my customers that Groups can be an easy enabler to start with SharePoint. Is there a way to convert one to another? Is there a need to? Groups are always ahead of a Teamsite, as a Group is a memebership service with memebers in it. You will be able to add groups functionality to teamsites. I would suggest to look at the session from Ignite: https://myignite.microsoft.com/videos/53450 where Christophe explains this and also the future roadmap of groups. Is there any method for creating Modern team sites or is there a difference between modern and "classic/2013 look and feel" sites? currently you always create a "modern" site. maybe its not here in your gov tenant yet. The admin portal shows false information, dont get confused by the 2013 term. I found a number of articles about creating 'Modern' sites, but they are just creating group sites (like this using pnp powershell https://github.com/SharePoint/PnP-Guidance/blob/master/articles/modern-experience-customizations-pro...) This is what leaves me confused about the differences between the two. From a governance perspective it might be useful to create groups and use the ful functionality in there. hope that helps.

Team sites - just basic sharepoint and nothing else
Group sites - sharepoint + a bunch of out-of-the-box collaboration tools

Groups does not replace teams, there are still countless use cases for non-groupified team sites

Team sites and Group sites can both be "Modern", there are differences between the look and feel but you can make pretty much anything in either site modern or classic

My general criteria:
If it is a thing that has a set purpose and set membership (like a workgroup, a project team, an organizational group), then it gets a Group site
If it is something else (a site for managing a particular type of document, a particular electronic form/workflow solution, etc) then just give it a Team site

You'll find Groups provisions lots of tools, and if you make everything a group, you'll end up with a lot of digital garbage.