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I am looking to use one of these techniques for site provisioning.

Both look very similar to me (having read a couple of blogs online), when would i use one over the other and are there any major limitations of either?

I will be using SharePoint 2013 on Office365.

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Remote Provisioning.

Remote provisioning is model where we actually do the template system outside of the SharePoint by using the new SharePoint app patterns. In this case we would be using provider hosted pattern to provide customizable sub site creation experience for the end users of the SharePoint.

Very good explanation over here Site provisioning techniques and remote provisioning in SharePoint 2013

The "Self-service site creation" feature allows users who have the "Use Self-Service Site Creation" permission to create Site Collections in defined URL namespaces. Site collection is different with Sub-site.

http://blogs.msdn.com/b/richard_dizeregas_blog/archive/2013/04/04/self-service-site-provisioning-using-apps-for-sharepoint-2013.aspx

https://msdn.microsoft.com/en-us/library/cc768020.aspx

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