SRT can only say what to show and when. ASS lets a subtitle editor such as Aegisub give each line its own font, colour, outline, position and animation, which is why fan-subbers and karaoke makers work in it. Converting an SRT to ASS is the usual first step before restyling a plain subtitle track.
The text is read as UTF-8 or UTF-16, whichever the file is. An older file in another code page is read using the charset it declares, or as Windows-1252 if it declares none, so accented letters in an unlabelled legacy file can come out wrong. A file that is not text, such as the picture-based subtitles of a DVD, is refused instead of being converted to nonsense. Of the styling, only italic, bold, underline and the position on screen (top, middle or bottom, left, centre or right) travel between formats; fonts, colours, outlines and effects do not. The file is written with a single Default style (Arial, white with a black outline) that the player or Aegisub can restyle, and times are rounded to hundredths of a second, the precision ASS has.