Key differences between interactive and time sharing operating systems? Couldn't find much online on how an interactive system is different from a time-sharing system, or the different traits of both.

My understanding of a time-sharing system is many people at terminals being able to use the system at the same time, and the CPU's aim is to maximise response time not CPU time (unlike a multiprogrammed batch system). The switches between jobs are very frequent, and users get immediate responses, when for example submitting interrupts via keyboard inputs. There is very little CPU idle time, duplication of software etc, but it is less reliable, there might be lower security and integrity, and potentially bad data communication. An example would be a chat messaging client or system.
Time sharing is a system of multi-tasking designed to allow multiple users to use a single machine at the same time.
A time sharing operating system is one that supports multi-tasking and multi-user.
In a time-sharing system the user typically interacts with the operating system through a secondary machine called a terminal.   

In an interactive operating system there is typically only one user on the system that has full control over the system.

Because of the environment in which time-sharing machines are used (large cooperations and banks) security and separation between users is a prime concern.  

Interactive computing originates from the hobby and personal computing revolution. Because there is only a single user security was initially not a concern.  

From these starting points the lines have blurred.
First single user systems gained multi-tasking and then multi-user concepts were copied over from time-sharing systems into the interactive OS'es.  

Meanwhile the security and performance of time sharing systems have also improved.