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: 
Dictionaries usually give these as synonyms, but there is a nuance: *legible* tends to refer only to the presentation, e.g. penmanship, while *readable* is broader. If what I'm looking at is a hard-to-read scrawl, that's illegible; if it's nicely typed but the grammar and punctuation are all wrong, such that it's hard for me to understand, that's unreadable.
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.