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Both a Room and a group chat can be used to message more than 2 people. See the below table for key differences...
|Typical user||Ongoing, long-term conversations with groups that might change||Short-term conversations with a set group|
|Who can chat||Can be added or removed at anytime||After the group is created, can't add or remove anyone|
|Conversations||Multiple, threaded conversation||Single unthreaded conversation|
|Message history||Message history is on||Message history is on by default, but can be turned off individually|
|Notifications||Users are notified for conversations they're in, or when @mentioned||Members are notified for every message|
|Leaving||Members can leave and rejoin||Members can't leave, but can hide the chat in the sidebar|
|Multiple with same users||Can have two or more rooms with same set of people||Can't have two group messages with same set of people|
|External users||Can include people outside your organization (must be Google accounts)||Can include people outside your organization (must be Google accounts)|