AppArmour assumes everything is allowed unless it is explicitly denied by policy, SELinux assumes everything is banned unless it is allowed by policy. This makes SELinux fundamentally more secure because unlike apparmour you cant forget to deny some access that leaves you wide open, instead you forget to allow things and your app breaks. It also makes SELinux more complicated to implement because you have to allow everything you need or your app breaks whereas apparmour lets you deny the things you're worried about and ignore everything else.

SELinux also supports interesting things like applying security levels and contexts to data, so you can have data that is only accessible to appropriatly cleared users in one department but not to people with similar clearances in other departments. Very few people use this stuff though.

Selinux uses extended attributes to store its labels which is a pretty standard way of associating metadata with objects, and is supported by most standard unix commands (via the -Z flag) so I'm not sure what you mean by "filesystem hacks". Fundamentally they are both implemented as security modules in the kernel and do pretty much the same thing, which is best depends on whether the added security of SELinux is worth it to you.