Each night, the current state of the master branch is built, so you can follow the development progress.
It would be cool to have an apk for each pull request, as with the Desktop Client, but unfortunately building the Android app once takes about 23 minutes, which would be worse if there were multiple concurrent Android builds. So @link2xt and I decided for nightly builds instead.
Yes, nightlies are produced using the latest android and core code available, even if both repos have no changes.
This allows you to install two versions in parallel to test interoperability between versions or if want to test a new nightly without uninstalling the one which is already working for you. Otherwise there is no difference, you can install any of them.