There is a bottleneck with bitcoin. Trying to send or receive bitcoin takes longer than it should. I have seen it take half a day in the past. Basically the network is stressed from overuse and has been for 2 years or more. The network is constrained to, I believe, 7 transactions per second and one megabyte. A network like Mastercard is orders of magnitude larger. Because there are more transactions happening than the bitcoin network is designed to handle, the miners are able to raise their fees making transactions more expensive than is comfortable. SegWit is a workaround or think of it as a something like a software upgrade. Bitcoin 2.0 if you will.
There has been a contentious debate brewing for 2 years between the two possible scaling solutions: SegWit or Bitcoin Unlimited. The miners control the hashing power and basically the network. Many miners have preferred Bitcoin Unlimited because it is arguably less democratic than SegWit and maintains their control. Of course, they would not admit as much and would list the strengths of Bitcoin Unlimited. The problem is Bitcoin Unlimited is an untested and dangerous protocol. Bitcoin has a market cap of $28B nowadays so maybe it is reckless to try something untested. Keep in mind also that miners of bitcoin are now large commercial operations located primarily in China where electricity costs are zero.
Litecoin is not superior to bitcoin. Litecoin is a clone of bitcoin with a few tweaks. Charlie Lee, the inventor of litecoin and bitcoin fan, would admit this. One of the main tweaks is confirmations times are faster/it is faster to send and receive litecoin than bitcoin. There are other altcoins with faster confirmation times, though, and that isn't the main determinant in the valuation of a crypto.
Litecoin is now using SegWit as of today. There are also other cryptos that use it: Syscoin and, I believe, Vertcoin. Keep in mind there probably never was a bottleneck on the litecoin network (don't know, haven't sent it in a while), so how litecoin is dramatically more valuable now as a testnet for bitcoin is unclear. Someday, bitcoin will probably adopt SegWit nullifying any litecoin advantage. Also, another upgrade called the Bitcoin Lightning Network would make transactions almost instantaneous, open new use cases and nullify the advantages of other altcoins. The Lightning Network gets around the scaling issue by conducting off-blockchain transactions and then entering a consensus on the blockchain at a later point. My guess is litecoin is again a testnet for bitcoin by instituting the Lightning Network first.
