DEVELOPMENT MODE
I have never used a localhost development environment to build a website using a CMS so I don't know what features they have but I presume that if its running on a localhost that its only accessible locally, the idea being to develop locally and then publish to the web once your development is complete. This most probably works OK in a lot of situations but, if you want to have a multi-developer approach to developing a web property with a CMS then its most likely going to go easier on you if you develop to on a server that is internet accessible. Quite possibly you have other ways to make that possible but the way I do it is to simply have a devlopment mode where only a webserver machine and a database machine are deployed that the CMS application developers can access from anywhere. This way you can have multiple developers all working on the production of a single web property. The way this would work is that development would take place against an internet accessible setup and then once the development is complete the application can be deployed to production where additional functionality is available such as autoscaling reverse proxies and so on.
PRODUCTION MODE
Production mode can be used to deploy autoscaling (it is static autoscaling at the moment rather than dyanmically adjusting based on load) because its expected that the type of websites developed will have predictable traffic and therefore won't need to scale up or scale down in response to some viral event. Production mode can also run webservers across multiple regions (of the same or different providers) whilst using a managed database from one of the providers. There is obviously a performance consideration but this can be kept to a minimum if your regions are relatively close such as Amsterdam, London and Frankfurt rather than London, Melbourne and San Francisco. The multi region deployments are quite involved from a design point of view and so to make a mental note here that any feedback on whether the multi-region deployment style is well functioning or not in a live situation would be valuable. At the time of writing this is a skunkworks project by one developer so I am as interested as anyone in how well it works under real world usage.
So, those are the two modes from a high level view. Its important to remember that someone is going to have to put in the effort to learn how what I have built here works if they want to use it in earnest and so the analogy I use is that just like you have to learn a CMS to become proficient in making websites with it you will have to learn a DMS if you want to become proficient in making deployments with it.