The graphical method for solving linear programming problems is applicable only when there are two decision variables, while the simplex method is used for problems with three or more. Key concepts include feasible solutions, optimal feasible solutions, and the feasible region, which are determined through specific steps such as plotting equations and identifying corner points. Limitations of the graphical method include its inapplicability for more than two variables and the potential for inaccuracies due to incorrect graphing.