CvC was building on his proposition that war is a continuation of politics by other means through an observational account of the historical transition from 'cabinet wars' (territorial) to 'Nepoleonic wars' (destroy the standing army). It is important to note the correlation in the shifting of policy and the shift in the type of warfare that was being fought to gain the political objectives in both periods, and how this relates to wars of annihiliation and wars of attrition. There are some very interesting insites embedded in these passages which deal with the relationship between generals and policy-makers that have been misinterpreted over the years. From my reading, when CvC talks about the two types of war he is referring to the variation in political objectives a state can achieve through the use of violence.
In making this observation CvC was taking into account the level and intensity of violence required to meet the political objectives set out by policy in both periods. A very rough present day example:
Ireal/Palistinian conflict's political objective is a 'terrirotial one', hence the level and intenisty of violence is only enough to take and hold territory
The initial phase of the Iraq war involved the political objective of overturning a regime, hence the level and intensity of violence was enough to annihilate the standing army and, in theory, the state of Iraq's ability to resist the political objective of the Coalition.