My understaning is that Foo->hello & hello are basically the same except the former is calling class method and passing 'Foo' to hello as the first arg, but the later is calling a subroutine and will not pass 'Foo'.

That's almost entirely correct. The method form, whether the invocant is the name of a class or an object, always performs dispatch. That is, Perl looks up the most appropriate method based on the given class. Then, Perl invokes that method and passes the invocant as the first argument.

The function form is a direct invocation of the subroutine of that name in the current package. There's no dispatch lookup step to find the most appropriate method. You get what's there, and the first argument is whatever you've passed in explicitly.