Luna/Astropad got back to me via an email, and here’s the response for anyone else interested:
Thank you for your interest in Luna and Astropad!
While Astropad only mirrors the Mac’s screen to your iPad,
Luna is a hardware piece which extends your Mac desktop – turning your iPad into a second display for your Mac.
Luna is designed for everyone who would like to have a second screen.
Luna Display has only basic input and no pressure sensitivity.
However, using Luna Display with Astropad allows the iPad to be second/extended display with pen pressure sensitivity.
And using Luna also helps Astropad, by properly adjusting the screen aspect ratios and/or resolution for the iPad side.
Luna + Astropad turns your iPad into a second display which also has drawing tablet capabilities.
Luna allows Astropad to fully control your second display bringing Astropad drawing experience to the next level.
More info on how Luna works with Astropad is available here – https://blog.astropad.com/using-luna/
A review demonstrating this, can be seen here as well –
Referring to your last question - yes, your Mac and iPad can be connected through the local WiFi network (or via USB).