Usually "battery life" refers to the length of time (sometimes measured in number of charge/discharge cycles) that a lipo battery can hold a sufficient % of its design charge to still be useful. With time and use lipos do deteriorate and will not be able to hold the max designed amount of juice. For example, the DJI smart battery is expected to last at least 300 charge/discharge cycles before it won't hold sufficient charge to be useful.
Battery level (expressed as a % or as a voltage or as number of milliamps) is how much charge a battery currently holds. Example, to store lipos for longer than a few days you should discharge them down to a storage charge level. This is typically 40-50% of the maximum capacity.
The P2 smart battery LED "power meter" on the back shows the battery level as a % of fully charged, the decode for which is in the manual (e.g. 2 solid green, one blinking green means "50 to 62.5% of max charge remaining").
