Way to output differences between two files (preferably using command line)

You probably want the Unix comm utility. Windows versions are included in gnuwin32

NAME

   comm - compare two sorted files line by line

SYNOPSIS

   comm [OPTION]... FILE1 FILE2

DESCRIPTION

   Compare sorted files FILE1 and FILE2 line by line.

   With  no    options,  produce  three-column  output.  Column one contains
   lines unique to FILE1, column two contains lines unique to  FILE2,  and
   column three contains lines common to both files.

   -1     suppress lines unique to FILE1

   -2     suppress lines unique to FILE2

   -3     suppress lines that appear in both files

This might work for you (GNU diff):

diff -u file1 file2 | sed -n '1,2d;/^[-+]/p'
+ball
-flan
+elephant