A self-contained MOV is exactly what its name implies … a file that contains all of the data within it and is not dependent on anything else, which is the reason for the much larger file size. You can take that file alone to another computer and it will play just fine.
A reference MOV is also exactly what its name implies … a file that does not itself contain all of the data and only “references” other files on your computer and is, therefore, totally dependent on those other files (render files, etc.). It is basically a shortcut, which is the reason for the very small file size. If you take that file alone to another computer, it will not play at all.
Which method is best for you depends entirely on your circumstances and workflow. If you are one of many editors who work on different systems that do not share storage, but you need to work with each others files, reference MOVs won’t work for you. However, if everything is done on one system, using reference MOVs can definitely speed up your workflow … it’s just important to understand that they don;t contain any content so you can’t depend on them as anything other than temporary work-in progress files.