I have the built-in Hue app installed on my Hubitat.
Are there any pros/cons to creating lighting groups in the Hue app vs creating lighting groups in the Hubitat app?
Yes, there are pros and cons to each approach--mostly cons to the former, in my assessment. If you create a group on Hubitat that consists of Hue Bridge bulbs, then each command to the Hubitat group involves multiple commands from Hubitat to Hue and Hue to the bulbs--one for each bulb in the group, both for Hubitat and the Hue Bridge. For small numbers of bulbs, this is probably fine, though you may notice a "popcorn effect" (where everything doesn't change at the exact same time).
If you make groups on Hue and then import the Hue group into Hubitat, then each command to the group on Hubitat is just one command in each direction: Hubitat to Hue, Hue to the bulbs--one per group. Hue uses Zigbee group messaging for groups (rooms and zones in the app), so that's why the number of commands on the Hue side is also reduced. Hubitat can do this with directly-paired Zigbee bulbs too, but the Hue Bridge integration is just LAN as far as Hubitat is concerned, so it can't do this here.
The advantage of a Hubitat group, I suppose, is just that it's easier to maintain on Hubitat. You don't have to go into the Hue app (or API in some way) to make changes. You can also see what bulbs it involves by looking all within Hubitat. I can't think of much else. 
Finally, it should be noted that Hue used to recommend rate limiting Bridge API commands like the ones Hubitat uses: about 10 commands/second for lights and 1 command/second for groups. (In most cases, a single Hubitat command should also translate into a single Hue command, but some things like the Scenes app may involve multiple commands for an activation to get all the settings right, for example.) I can't find this formally documented anymore, so perhaps Philips no longer considers this a recommendation, but it's probably still a good guideline. Again as a con for Hubitat groups of Hue Bridge bulbs, you're more likely to hit that former limit with that configuration (though Philips' estimates of Hue capabilities are generally under-stated, so you'll probably be fine even if you exceed either of these by a little).
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Thank you very much for that thorough explanation!
It’s exactly what I needed to know.
