Muscle is the tissue which contracts and relaxes to cause your horse to move. Muscling refers to the length, definition and volume of muscling in your horse.
Soundness refers to a horse that has no problems or injuries that affect its movement and usefulness. Soundness is extremely important because the efficiency in a horses performance is dependent on its ability to move. When you look at a horse, it is important to watch for unsoundness and blemishes. The difference in these two terms is in how thye affect the horse.