Is it possible to use the \"diff\" tool without having physical files? Something like this:
diff \"hello\" \"hell\"
You can diff standard input with a file by using the special filename -
:
# diff the contents of the file 'some-file' with the string "foobar"
echo foobar | diff - some-file
With bash, you can also use anonymous named pipes (a bit of a misnomer) to diff two pipelines:
# diff the string "foo" with the string "baz"
diff <(echo foo) <(echo baz)
See also How can you diff two pipelines with bash?.