Ranking refers to the actual placement or order a search engine gives a webpage based on its relevancy to a particular search term.  Search engines display results with the most relevant page ranked first with less relevant pages listed in descending order. Google, for example, will display websites that rank 1 to 10 on the first page.

Traffic refers to the amount of people (also called end-users) that visit your website.  The quality of traffic is equally important as quantity (or traffic volume) if the goal is to create an action like purchasing a product or filling out a contact form.