Sahih li-dhatihi requires complete precision. By contrast, in hasan li-dhatihi the narrator is upright and the transmission retains the basic conditions of acceptability, but his precision is somewhat below that of a sahih-grade transmitter. This does not mean that he is generally unreliable or habitually mistaken.
Technical comparison:
Upright + fully precise + continuous chain + no disqualifying ʿillah or shudhudh → sahih li-dhatihi.
Upright + somewhat reduced but acceptable precision + remaining conditions → hasan li-dhatihi.
Application: A transmitter may be mostly accurate but not quite as exact as the highest-ranked narrators; this can lower a report from sahih to hasan. Severe or frequent mistakes cannot be rebranded as minor reduction in precision merely to retain an accepted classification.