Inland:
Must stay in Canada for the duration of the processing.
Your spouse can get an open work permit after around 6 months processing time if you applied for it and everything goes well.
With implied status, if you applied for an open work permit or extention with your sponsorship package, your spouse can stay with you for the duration.
If an interview is required, there's no open work permit and the application can be delayed by a long time, 1-3 years depending on how busy the visa office is.
No appeal rights if you are denied.
Outland:
Your spouse can be in Canada or outside Canada or going back and forth during the processing time but has to maintain legal status, apply to extend visit status if they want to stay longer etc.
No open work permit.
If you are refused, you can appeal.
The processing times vary by visa office. They can be shorter than inland but may also be longer.