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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...

RoomsGroup chats
Typical userOngoing, long-term conversations with groups that might change Short-term conversations with a set group
Who can chatCan be added or removed at anytimeAfter the group is created, can't add or remove anyone 
ConversationsMultiple, threaded conversationSingle unthreaded conversation
Message historyMessage history is onMessage history is on by default, but can be turned off individually
NotificationsUsers are notified for conversations they're in, or when @mentionedMembers are notified for every message
LeavingMembers can leave and rejoinMembers can't leave, but can hide the chat in the sidebar
Multiple with same usersCan have two or more rooms with same set of peopleCan't have two group messages with same set of people
External usersCan include people outside your organization (must be Google accounts)Can include people outside your organization (must be Google accounts)

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