die Pelle
skin / casing
The thin skin or casing of a sausage.
Isst du bei der Wiener Wurst die Pelle mit?
Do you eat the skin of a Vienna sausage too?

skin / peel
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skin / casing
The thin skin or casing of a sausage.
Isst du bei der Wiener Wurst die Pelle mit?
Do you eat the skin of a Vienna sausage too?

'Pelle' (skin/peel) is a colloquial word. In more formal contexts or in written language, people would more likely use 'Haut' (skin, for sausage), 'Schale' (peel, for potatoes), or 'Haut' (skin, for people).
Zieh bitte die Pelle von der Wurst, bevor du sie isst.
Please remove the skin from the sausage before you eat it.
The word 'Pelle' (skin/peel) is especially common in northern and western Germany. In southern Germany or Austria, other terms such as 'Haut' (skin) or 'Schale' (peel) are more common.
In Norddeutschland isst man Pellkartoffeln mit Quark.
In northern Germany, people eat potatoes boiled in their skins with quark.
The idiom 'jemandem auf die Pelle rücken' (to crowd someone/get too close to someone) is fixed. The person being pressured is always in the dative. The expression describes intrusive behavior.
Hör auf, mir so auf die Pelle zu rücken, ich brauche etwas Platz!
Stop crowding me like that; I need some space!
In the meaning of 'Schale' (peel), 'Pelle' is very strongly associated with potatoes. The best-known example is the dish 'Pellkartoffeln' (potatoes boiled in their skins), meaning potatoes that are cooked with their peel on.
Pellkartoffeln sind schnell gemacht und sehr gesund.
Potatoes boiled in their skins are quick to make and very healthy.
When it comes to human skin, there is the idiom 'sich in seiner Pelle wohlfühlen' (to feel comfortable in one's own skin). It means that you are satisfied with yourself and your body.
Seit er regelmäßig Sport treibt, fühlt er sich in seiner Pelle wieder richtig wohl.
Since he started exercising regularly, he feels really comfortable in his own skin again.
skin
'die Haut' and 'die Pelle' can both mean a thin outer covering. 'Haut' is the neutral word for the body of humans and animals, and also for thin layers on some foods. 'Pelle' is more commonly used for sausage, potatoes, or onions. For a person's skin, 'Pelle' is colloquial and can sound rough or derogatory. That is why learners may confuse the words, but they should be careful: in normal or polite situations, 'Haut' is the right choice for people.

Beim Frühstück ziehe ich die Pelle von der Wurst ab.
At breakfast, I peel the skin off the sausage.
Johanna cremt ihre Haut ein, weil sie im Winter schnell trocken wird.
Johanna puts lotion on her skin because it quickly gets dry in winter.