Here's the differences between the two:
Occupation: Lower trade (halved while you're at war), you get 1/2 ICs and all resources from the lands you hold, and in the next patch there will be partisan groups that spring up.
Puppet: You don't have to run the country/armies, you don't get any ICs and don't have to deal with rebel groups, but you get half the resources from your puppeted nations.