The main difference is the focus of the story. Tamako Market is more about the daily life of the characters in the market, while Tamako Love Story is centered on the romantic development of Tamako.
I haven't heard anything about a Tamako Love Story 2. Usually, if there were plans for a sequel, there would be some buzz or official news, but there's been none so far.
It's best to watch Tamako Market before Tamako Love Story. The plot and character development in Tamako Market lead into Tamako Love Story, making it more meaningful and enjoyable when watched sequentially.
One anime similar to 'Tamako Love Story' is 'Kimi ni Todoke'. It has a sweet and innocent love story, just like 'Tamako Love Story'. The main character, Sawako, is a shy girl who gradually opens up and falls in love. Another one is 'My Little Monster'. It features a relationship that develops between two very different characters in a really engaging way. And 'Toradora!' also has a great love story with interesting character dynamics.