Hi, let $V$ be the finite element function space with basis functions $\phi_i$ and degrees of freedom $L_j$ that satisfy $L_j(\phi_i)=\delta_{ij}$. Now take some function $u$ and suppose you want to create its interpolant $u_h\in V$. From $u_h=\sum U_i\phi_i$ you get by applying the functionals $L_j$ that the entries in the vector of expansion coefficients are $U_i=L_i(u)$. For elements with this nodal basis the interpolant is thus constructed simply by evaluating the degrees of freedom. Beware of the recently found bug - for enriched elements the basis might not be nodal, but the interpolant is constructed as if it were so, see here and here.
Projection $\pi_h u\in V$ of $u$ is a function that minimises $L:V\mapsto R$, $L(v)=1/2||v-u||_{L^2}$. This leads to a condition that $\pi_h u$ must solve: Find $w\in V$ such that
inner(w, v)*dx=inner(u, v)*dx
. In other words projection is obtained by solving a linear system, see here.