Hi Suneel,
Firstly, we can create the Tcode in many ways as you have said before.
You can even create transaction in the Object Navigator SE80 also with easy steps.
Coming to the Points mentioned above,
We use Parameter Transaction option for those scenarios where we need to default the selection screen with some values or even skip the initial screen for that instance.
Eg. We create the TCODE for Table Maintenance Generator with Parameter Transaction. By using it, we can give the default values in the initial screen and skip it as well.
If you are creating TCODE for a Report Program go with report transaction,
Typically in a report transaction, at he beginning of the execution, we get data from the user through a selection screen, processes the data, and then show the output.
While creating the transaction code, you can specify the selection screen and even select the saved variant.
Regards,
Sivanand Ala