Resolution:
A DB2 Database is nothing more than a defined grouping of DB2 objects.  A database should be used to group like tables in an application system or in different runtime environments e.g. Development, QA or Production.  A Tablespace in DB2, equates to a physical file, contains one or more DB2 tables. The file organization is VSAM (Virtual Storage Access Method), which is an indexed sequential file. DB2 requires VSAM file to store table data. CICS/VSAM is a very popular combination, if not using DB2, for mainframe online applications.