The software does so by smoothing colours and brightness. Mask tab becomes an easier part to control locations of photos which are needed by users and intelligently fix the overlapping areas between pictures.
On the top of all, Hugin can stitch panorama pictures for you which are shot in different directions. It will assemble the complete scene for you. Mosaic mode comes in to do perfect stitching for a normal panorama.
Hugin also supports pictures taken with different lens types. It can fine tune variation of distortions by using orthographic, stereographic and equisolid lenses.