the sfp will be capable of higher throughputs

the function of loopback to connect to tcp/ip in networking

(config)#no interface loopback x

An SFP module means to a small form-factor pluggable machine it's like a small transceiver SFP module means high-speed communication facilities between switches and another computer network. The SFP transceiver is mostly used with copper cable and Fibre optic cables. These ports are connected with other devices and networks using an SFP transceiver.

The only difference is the relative location of the device that is in loopback mode. Local loopback testing is when your device is set to send back everything it receives to the sender, aka loopback mode. Remote loopback testing is when your device orders a foreign device to enter loopback mode.