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The biggest difference is open world vs specifically crafted tracks.

Open world is great for hanging out, exploring the landscape (you can go anywhere, roads are optional in some of its disciplines) and basically being there. Like going on a small holiday, enjoy the sunset in Mexico while getting a little taste of the culture.
FH5 is a festival game which constantly rewards you with gifts. Racing is just one of the many activities and you have road racing (a circuit sectioned off without traffic), street racing (a ribbon to follow with traffic), dirt racing (a ribbon to follow over dirt roads) and off road racing (check point to check point cross map). Next to that you have all kinds of stunts, barn finds, story missions, showcase events, speed traps, drift sections, houses to buy, there is always something to do near you on the map.
Unfortunately it lacks any feeling of progression and you can basically complete the whole game with one car. It's a jump in and do whatever game.

GT7 focuses on the tracks and cars. All the tracks are either real life or carefully hand crafted for optimum flow suited to racing. They are also all over the world instead of one location. In GT7 the skies will even be different (and dynamic) depending on location in the world.
GT7 focuses on a realistic driving experience, no 500ft jumps like in FH5 and better stay on the road or you end up with dirty tires compromising grip.
You can enjoy the history of cars through it's many museums and in the cafe.
GT7 has a driving school to teach you all the techniques, track experience to learn all the tracks, a campaign with actual progression from slow family car to race car driver, and a ranked competitive online racing environment that tries to separate the clean drivers from crash kiddies.

Both allow modding, tuning and painting of cars. But that's really the only overlap there is.