I previously already understood "说话" to mean "to speak" or something to that effect, but just recently I saw the term "话说" and was curious if it carried the same meaning (which is often the case I've noticed). I checked my go to dictionary (Yabla) and according to that the definitions are slightly different, with "说话" defined as "to speak/talk" and "话说" defined as "to discuss/recount". Is this how the two terms are actually used or is the dictionary teaching me wrong practices? Is it practical for me to even differentiate the two?
You need to differentiate them as "话说" carries a different meaning. It is used when people want to start a topic. It is very commonly used in ancient novels, where authors always speak as a storyteller and use "话说" to begin the story. In informal conversations someone may also use it now (actually I used to say it many times), a little like "by the way" in English.
My personal opinion is that, practically you'd better avoid using "话说" in your writing when you are not a high level Mandarin writer, because I think "话说" is related to a specific writing style. You may use "话说" in informal conversations.