While in workshop mode, what is the difference between green and yellow highlighted items?

That seems to be the only difference. Items with a green trim can be picked up, moved, and placed in the settlement, or stored in the workbench for later use (note: it seems you can only store items that you can build yourself from scrap. Some items can be moved/placed and functionally used, but not stored, such as white picket fences). Items with yellow trim are simply for salvaging materials, and their names occasionally imply this, as they are often "ruined" items (ruined house, broken toilet). Yellow items are also not movable in workshop mode, which also supports that they don't have any real use in the settlement.

It seems safe to scrap anything with a yellow outline, with maybe a couple of exceptions. If you scrap a container (such as mailboxes), you might want to make sure it is empty first, or you'll have to retrieve the contents from the workshop inventory later. Or, perhaps, if you wanted to keep any trees that remain upright in the settlement, don't scrap it for wood.

Yellow items cannot be moved, cannot be rebuilt, and are essentially just scrap (but you can keep them around for aesthetic value if you like).

Green items can be scrapped just like yellow items but can also be stored and rebuilt. An important thing to note though is that you can only store them if you've "unlocked" them. For example, Sanctuary has several picket fences and initially you can only move or scrap them, but you can find a magazine that allows you to not only store them but to also build new ones.