1. LocalSystem has not password and few privilege(as computer acccount), Service Account has the context of the domain account (Actually, LocalSystem does have a password just like your own account, but normally you don't have to worry about it)
2. Whenever you change password of a Service Account, you have to make change in the corresponding service properties via services console
3. LocalSystem on a DC has all rights against AD, so it's not recommended to use LocalSystem for starting a non-builtin service on DC
4. LocalSystem is subjected to remove when you remove the computer out of the domain, while Service Account remains in AD