I want to know exactly how to pass ID of a record into Webhook from Zoho CRM, and I see that there are two options to pass parameters, 
1-       Append Entity Parameters

2-       Append Custom Parameters.
 

I want to know, what is difference between these both.

And I also want to know, Can we use LocalHost in Webhook URL instead of live server?

Please guide me.

Any help will be appreciated.