What is the difference between: I am a shareholder as on Record Date and undertake to hold RE till issue closing date and I am renouncee and hold rights entitlement in valid Demat account to hold RE till issue closing date. Which option must be chosen?

If you are a share holder Your demat account is directly credited with the REs because you held the company's shares on the specified record date

You are the "renouncee if you bought the REs on the stock market (secondary market) during the trading window." You now hold the rights and can apply for the shares by the issue closing date, but you cannot apply for any additional shares beyond the REs you purchased.