Hi,
The main difference between using a LUN or not is to decide who is the responsible for the File System.
In a LUN the servers connected to it are the responsible for maintaining the file system. The allocation table is stored in those servers. For the Ontap this is just a file with some data but meaningless.
If you just use a volume without using a LUN. The responsible for the for system is the Ontap (actually is the WAFL).
I am gonna try to put this way:
If you go to a restaurant and there is a valet service there you give your car with key to someone who will give back a ticket so you get your car back on exit. It is not your responsibility to park your car. This is like not having a LUN.
Instead if there is no valet service or you decide not to use it. You must park your car and on exit you must remember where is it, if it's raining you get wet but you are the one who will decide what to do with your car. That's like the LUN.
I hope this help you.
Sorry for any typo but I am using my mobile.