I do think of art and craft as two separate things. Art takes great skill and years of training/practice to produce something that would hang on a museum wall. This definition does not always work since minimalism and pop art seem like things that anyone can do. And most people consider Andy Warhol’s “32 Campbell’s Soup Cans” and Marcel Duchamp’s “Fountain” art, so it’s a definition that needs work.
Craft is like what I do. Most people call me an artist because I draw. But really I just doodle. I draw cartoon characters. Maybe I’m just being humble, but I don’t consider myself to be an artist. Craft is the majority of Michael’s (one of my favorite stores) where they sell kits and projects. You can make gingerbread houses out of foam board, cross-stitch projects. That’s not art. It’s craft. Someone else mentioned in their post that craft is the process. When I think of what I buy at Michael’s, I get kits with instructions detailing how to put things together. Maybe when I start drawing my own designs on graph paper and then stitching them, maybe then it will become art. But for now, it’s craft.
I feel like a snob, but I really think there is a distinction. However, they can blend. Literature is functional and beautiful. And books can be designed in a way that is more about art than about the words. That’s why it’s sometimes call book art.
So final answer: Art and Craft are two separate things, but they can overlap (I’m picturing a Venn Diagram in my head with the two circles that over lap slightly in the middle).