"aabcc" and "abc" are also "5 close". Is this still expected?

Well, they are either 5-close or 3-close depending on what order you submit them to the original function. (I really do think a commutative version, like dragonchild's second one, is the desired behavior.)

How would you expect to score "beard" and "bread"? How about an example where no two letters are in the same position, like "peach" and "cheap"? By my reasoning, both pairs would be 5-close even though they aren't equal.

After looking at your example again, "aabcc" and "abbbc", I suspect you think those should be considered 3-close (based on number of unique chars rather than length.) I suppose that has some merit, but it would result in any combination of "case", "cases", "cease", and "ceases" being 4-close. I think it makes sense that "case" and "cease" would be 4-close but "cases" and "cease" would be 5-close.

Like you say, we can't really know without some input from the original poster... sigh.

-sauoq
"My two cents aren't worth a dime.";