Fujifilm X-T2 has a
24.0MP APS-C (23.6 x 15.6 mm ) sized CMOS X-TRANS III sensor and features X-Processor Pro2 processor. On the other hand, Canon ELPH 350 HS has a
20.0MP 1/2.3 (6.17 x 4.55 mm ) sized BSI-CMOS sensor and features DIGIC 4+ processor.
Another difference between these two cameras is that Fujifilm X-T2's sensor lacks anti-alias (Low-Pass) filter. Removing anti-alias filter increases the sharpness and level of detail but at the same time, it increases the chance of moiré occurring in certain scenes.
Below you can see the X-T2 and 350 HS sensor size comparison.
As seen above, Fujifilm X-T2 has a 13.1x Larger sensor area than Canon ELPH 350 HS. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.