Can someone explain the difference (if there is one) between the insurance that you can purchase through the cruise line versus the travel insurance that you can purchase through an outside source? What do people recommend that you go with?

The outside policies generally offer more coverage and can be less expensive too.

Also, the outside companies can offer coverage in case the cruise company goes bankrupt (not likely, but it has happened in a few cases in the past). If you purchase the cruise line's own insurance, there is no such protection.