The obvious difference between the Lx and the GT are the skirts. GTs have the ground effects, different wing, I believe different power seats, and of course those fancy GT badges.
The LX is lighter, and faster.
As far as your question about the performance decrease. Ford changed many things slightly throughout the 225 hp run such as a milder cam. air silencer etc etc. None of the things by themselves were much of an impact. but combined resulted in a 205 run. I was just reading about this a few days ago and was trying to find the link for you, but I failed.
Here are two links that I found interesting
http://www.veryuseful.com/mustang/tech/engine/ http://home.pon.net/hunnicutt/history_79_93.htm
You can google just about any question you can think of about a mustang and there is someone that posted something about it. I have found this most helpful on the path i have chosen so far.
Anyone remember Crazy Pete and his Rust Proofing? google it "Crazypete Rust Proofing" You will shake your head and laugh. There were follow up posts for years.