The distinctions among Windows user permissions and any set of SQL Server GRANTs seem like unrelated concepts. As often as not, it seems to actually be implemented with pseu
Database may have a fine grained access with lots of settings different for each user. It is not only scenario where you have one user for application access and that is all data security.
If we are talking about team development then probably there will be user group granted development access to database. Each user in this group will be member of your internal domain and have own passwords which database admin not supposed to manage and even know to allow access to database.
Disregarding the grant table/etc side of things, the login side of things is very useful, because your app can connect to SQL server using windows authentication, which means
You don't have to put your database username and password in a file in your application somewhere
Any time you put a password in a plain text file, that's a security risk. Avoiding that is great.