How diffraction sets limits on the smallest details that can be seen with an optical...

Diffraction limit means that an imaging lens could not resolve two adjacents objects located closer than $m=\frac{0.5mm}{0.4mm}=12.5\approx 12$
where $\lambda$ is the wavelength of light and NA is the numerical aperture of the lens.
E.g. The resolution of optical imaging instruments, is fundamentally limited by the diffraction of light.
The diffraction limit of light mean that the wavelength of light is equal or small of the boundary system.
Criterion for determining the diffraction limit to resolution based on this angle was developed by Lord Rayleigh in the 19th century.
Rayleigh criterion:
The Rayleigh criterion for the diffraction limit to resolution states that two images are just resolvable when the center of the diffraction pattern of one is directly over the first minimum of the diffraction pattern of the other.
$\theta =1.22\frac{\lambda }{D}$
where $\lambda$ is the wavelength of light (or other electromagnetic radiation)
Dis the diameter of the aperture with which the two objects are observed.
θ has units of radians.