Holes in a function's graph occur when the function is undefined at certain points, typically due to a zero in the denominator, but can be removed through algebraic manipulation, leading to removable discontinuities. In contrast, asymptotes arise when a function approaches a specific value infinitely closely as x approaches infinity, without ever reaching it. This distinction is crucial, as holes indicate points of discontinuity while asymptotes signify behavior at the extremes of the function. The identification of these features requires a deeper examination of the function's behavior rather than simple zero comparisons. Understanding these concepts is essential for analyzing the continuity and limits of functions effectively.