The obvious difference between a close grip lat pulldown and a wide grip is the distance between your hands. But it’s the position of your arms as you pull the bar down that changes the exercise.
With a wide grip lat pulldown, your upper arms pull out and back. At the bottom of the movement, your arms stick out to the sides when viewed from behind. But they’re almost in line with your body from the side.
On the other hand, a close grip lat pulldown pulls your arms in and forward. From the back, your arms are tucked in close to your body. But from the side, you can see that they extend out in front of your body.