Briefly, VFR = Visual Flight Rules. You control the aircraft by looking outside. IFR = Instrument Flight Rules. You control the aircraft strictly by reference to instruments (you need to do this in clouds, for example, when you can't see the horizon).
As iguanayou already pointed out it’s the type of rules a flight is flown under. As you might imagine it’s far easier to simulate IFR flying because it’s largely technical and about animating gauges as there’s little to look at outside when you’re in the clouds or even just high altitude.
VFR on the other hand is all about visual reference to what’s outside. To truly have a VFR experience in a sim you would need incredibly detailed rendering of the outside world which is very graphics and memory intensive. FSX from Microsoft came close but at the time it brought most hardware to a crawl with the settings dialed up and then MS abandoned the franchise.
If MS pulls off their new sim well we might finally be there where a decent VFR flying experience can be simulated when combined with a head mounted display that lets you easily look around out the windows. Time will tell though. I just read something today saying 40 FPS at 4K on a GTX2080. That’s pretty intense.
I know nothing about flying but it's something that I am always thinking about learning, but if VR is good enough to scratch that itch, I'm up for it.