It's literally that. A physical model is some situation or object that can be possible touch. Instead of drawing a car that had a new design of some sort, you could build a model of it to illustrate the idea. The limitation of physical model is they look like a real thing. A mathematical model is a model that records data or information. An example of this is a graph. An equation can be also a example of mathematical model like Newton's Model of the Gravitational Energy is E= -mGM/r = mu/r.
