Is there a difference between the two? Will lifting free weights make me gain muscles faster?

I think you're referring to selectorized weight machines. There is a huge difference between the two.

Except for the specific movement, a machine does the rest of the work for you. Allow me to explain. When doing a machine chest press your body is responsible for only the positive and negative pushing movement. When you utilize barbell or dumbbell your body is responsible for maintaining stability on all planes of movement (Keeping the bar from tipping, wobbling, going to far over your stomach, going to far back over your shoulders.)

Free weights challenge all the synergistic muscles that aren't otherwise touches when using machines.

hmm, if indeed by universal weights you mean machines, then I agree with adler

Does this impact my development? For example, bench press using free weights vs. the machine weights, will my development be the same or less using the machine weights?

Much less on machines weights. Free weights have a much bigger positive impact on your developement. THere is too much isolation in machine exercises and they don't train any stabilizing muscles. You should definitely stick to bench press with free weights. TRaining stabilizing muscles is really important. There aren't really any real life events that isolate just 1 muscle group by itself.

Yes. Using only weight machines can cause muscle imbalance and possibly injury. Not to mention your gains will be limited. just because you can overhead press 100lbs on a machine, does not mean you can overhead press 100lbs in a real world situation (i.e. dumbbells, barbell, a small friend you want to body slam) because your stablization muscles lack developement.

Stick to free weights whenever possible. If you're traveling or can't make it to the gym, machines can be used in a pinch, but shouldn't be a major part of any routine.