so it might look like: [A,C,C,C,A,T,G] and [A,C,C,C,A,A,T,G], now how can we say what corresponds to what? Do we say there is a SNP at the fifth/sixth base pair?

We say the second one has an insertion at 5.

Have you read the vcf format? It describes how all kinds of variants are documented.

https://samtools.github.io/hts-specs/VCFv4.2.pdf

so it might look like: [A,C,C,C,A,T,G] and [A,C,C,C,A,A,T,G], now how can we say what corresponds to what? Do we say there is a SNP at the fifth/sixth base pair?

We say the second one has an insertion at 5.

Have you read the vcf format? It describes how all kinds of variants are documented.

https://samtools.github.io/hts-specs/VCFv4.2.pdf

What about something more different like [A,C,C,C,A,A,T,G] and [C,C,A,A]? How do we know what corresponds to what? What are the SNPs?

Absent any context, why would you want to compare two completely different sequences like that?

If you really wanted to compare them, surely single nucleotide polymorphisms isn't the right way to think about the differences.