Copy editing (commonly termed Line Editing and/or Stylistic Editing) Copy Editing includes checking and improving grammar, spelling, punctuation and other mechanics of style, checking for consistency of mechanics, and internal consistency of facts. It may include adhering to other spellings of other Englishes as appropriate, metrication as appropriate, editing back matter, and cover copy. It may also include fact-checking, and mark-up, clarifying meaning, eliminating jargon (unless it's part of the story!), smoothing language (but in keeping within the world of the story) and other non-mechanical, line-by-line editing. It may include checking or correcting the reading level.
What to expect This is the scary stage (no, not really), but it is likely to be the most marked-up part of your work. Sometimes the editor's marks appear rather "Pollock". But, hey, not to worry, because together we'll sort out your story. That's what I'm here for. By using Track Changes, I will sift line by line on every page of your manuscript, scrutinizing every comma, for example, and read it as a reader. If my eyes trip, then I'll mark where, and tell you what the error is, and sometimes, if necessary, add a comment explaining why (because all those grammar rules you remember from grade school, right?).
This is the whole pie, so to speak (not to mean pumpkin, but that would be good right about now). Editing is done on a macro level, for the entirety of the narrative, and changes may be suggested to re-organize the content or structure of a book. This kind of editing may offer some line by line editing, depending on the section at hand, but mostly comments are provided to allow the writer a better understanding of how the story has taken shape, and areas that need a stronger logical sequence, for example, would be noted. It is at this stage, often, that writer and editor may need to discuss the breadth of the novel, and it is also an opportunity to do so by Skype. Substantive editing does not cover Developmental / Project Editing, which is co-ordinating and editing a project from the proposal or rough manuscript and deals with larger and integrated issues such as budget (quite a different pie).
What to expect In consideration of the story, there are more than a few things the editor thinks about: the protagonist's mission, the characters' goals, plot points and chapter goals, the sequence of events, the characters' personalities and dialogue, pacing, and other important elements like continuity. I weigh elements like these against the author's initial synopsis, the genre intended, and the readability. What you'll see are comments in Track Changes addressing a line, paragraph, page, or even chapter. Some line editing may occur, but the suggestions are more wholistic (Dig in. You may need a serviette for this.).