This type of editing checks all the internal world building rules you have created for consistency and clarity, whether the plot has any pacing or holing issues, and any issues with characterisation.
Overall it checks for readability, while also taking care of the nitty-gritty things such as typos and grammar that a copy edit or proofread would also cover.
Copy editing or line-by-line editing looks at your manuscript at the sentence level and is not as concerned with the story as a whole.
This will still catch most errors, such as tautology and typos, ensuring the story maintains it's consistency and readability but will not be take into consideration the elements that developmental editing will.
Proofreading is the final stage after editing has taken place and should only be done once you are happy with everything else. There is little point to proofreading if there are plot holes littering the story or if there are issues with grammar and tense throughout.
This catches any small mistakes that were missed during the other stages of editing your manuscript and will take place just before publishing.