Deunydd neu defnydd

Sound similar but I believe have slightly different meanings - deunydd a defnydd

Yes - deunydd these days generally means material or similar - reading matter for example is deunydd darllen. Then defnydd for use - for example gwneud defnydd o rywbeth make use of something. But I think in earlier stages of the language, and in LitWelsh generally, you do see overlap.

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Diolch yn fawr Gareth