Question: Could you explain what is a difference between readable vs legible? 

Which should I use when I want to say "This diagram is easily readable/legible" while meaning - "It is very easy to read and understand meaning of this diagram"?

Answer: 
Both **legible** and **readable** have sense of "clear enough to read".

> 
> Her handwriting was clearly legible.  
> 
>  The figures should be clearly readable
> 
> 
> 

But, **readable** also may mean "easy, interesting and enjoyable to read".
If you cannot understand what is written though it is clearly written/typed it is incomprehensible (as in you cannot understand it). Legible means that you can read it and illegible means that it is so badly written/scribbled that one cannot read the words at all. Those are two very different situations.