Difference between 8 bit and 16 bit in Photoshop

I have been working on Photoshop for quite some time now, but there is one thing that has got me confused till now. Is it better to be working on a 16 bit color mode or an 8 bit one? I know that the 16 bit should be better for images etc, as there are more colors to display, but on a file with lots of smart objects , what would be the best mode to work on? Also, does switching from 8 bit to 16 bit change the file size considerably?

I'm not sure whether this is a stupid question! So please be gentle, in case it is!