What's the purpose of Factory Girl in rspec tests when I could use
Gems like Factory Girl and Sham allow you to create templates for valid and re-usable objects. They were created in response to fixtures which where fixed records that had to be loaded into the database. They allow more customization when you instantiate the objects and they aim to ensure that you have a valid object to work with. They can be used anywhere in your tests and in your before and after test hooks.
before(:each), before(:all), after(:each) and after(:all) all aim to give you a place to do setup and teardown that will be shared amongst a test group. For example, if you are going to be creating a new valid user for every single test, then you'll want to do that in your before(:each) hook. If you are going to be clearing some files out of the filesystem, you want to do that in a before hook. If your tests all create a tmp file and you want to remove it after your test, you'll do that in your after(:each) or after(:all) hook.
The ways these two concepts differ is that Factories are not aimed at creating hooks around your tests, they are aimed at creating valid Ruby objects and records, so that you can keep your object creation flexible and DRY. Before and after hooks are aimed at setup and teardown tasks that are shared in an example group so that you can keep your setup and teardown code DRY.