Can someone please let me know what is the difference between "Binary mode" and "Not-binary mode"?
"Binary mode" traditionally will transfer the file without any processing nor use any protocol. The data from the file will be transferred byte for byte: nothing will be inserted or removed or translated.
For TeraTerm, binary sending is described in its documentation as
If you select this option, received characters are sent without any modifications.
Otherwise, new-line codes are converted and control characters (except TAB, LF and
CR) are stripped out.
For TeraTerm the opposite of this "binary mode" could be called (ASCII) text mode.
The alternative to binary/text modes for file transmission by a terminal emulator program would employ a file transfer protocol such as kermit, xmodem, ymodem, or zmodem.