A few clarifications on different URL types

Embedded connection vs server mode

I have an app running in grails that runs on a server.  On the same server 
I have H2 running.
Does this mean the grails app can talk to the H2 db ? (no external 
connections)
or
The grails app cannot talk to the db ?

======================================================

Setting user and password

What is the difference between 
URL="jdbc:h2:tcp://localhost/mem:test;DB_CLOSE_ON_EXIT=FALSE;DB_CLOSE_DELAY=-1;"
java -cp h2*.jar org.h2.tools.Shell -url "${URL};INIT=RUNSCRIPT FROM 
'putdata.sql'" -user cool -password columbus -sql "SET @ignore_me = 0;"

vs

URL=jdbc:h2:file:~/sample;USER=sa;PASSWORD=123

Essentially setting password in java command line vs password in the URL.

Am I understanding this all wrong ?

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