Balanced connections have two signals, a positive and a negative signal, which are inverted versions of each other. They carry the signal currents. At the destination, these are subtracted from each other to create the signal. Any noise that is the same on both cables will be subtracted-out. There is also usually a ground that does not carry signal current - it's function is to force the grounds in the two components to the same potential. The ground conductor can be a wire or an overall shield surrounding the other two signal conductors.
Unbalanced or Single-Ended connections have a signal and a ground RETURN. Both of these carry current and the signal is driven at the source with the return current flowing back to the source on the ground conductor. The ground conductor can be a wire or a coaxial shield, depending on the design.
XLR's are superior is a number of ways. First, they are locking, so they won't pull loose. Second, they have male and female, so you can't accidently plug them in backwards. Third, they use a two signal system comprising an uninverted and an inverted signal plus a third wire ground, which carries no signal current. This "balanced" or "differential" signalling system allows the receiving component to have better noise rejection than with Single-Ended (SE) signalling. This is possible because the receiving component subtracts the + and - signals to get the signal that is used in the component. If there is any noise that is common to both + and -, this will be eliminated by the subtraction process. This is referred to as "common-mode" noise, which can include 60 Hz hum, Schott noise, RFI etc...
The thing that you need to be aware of is that all designers do not have good designs for Balanced inputs and outputs. To determine which of SE and Balanced sounds better, you need to listen to both on a given component and choose the one that sounds best.