I really can not find a justifiable answer to this question. Are they used interchangeably? One answer that's i found to be true is that we use the term literature review in writing thesis and related work in the writing research paper. but i am not sure if it is correct or not?
I've been looking last week for the difference between the literature review and the background. And I found this which may help you, a good definition of what the literature supposed to be (in my opinion): https://academia.stackexchange.com/a/49629/57676
I'm not sure, but I think the literature review can be regarded as related work in more storytelling style. And yes, related work is more frequent in research papers because you don't have enough space to "build a conceptual structure that ties together all the key ideas". Therefore, you just describe briefly what has been done and maybe try to compare it theoretically against what you're proposing, I think.
I have also faced this problem of defining the difference between these two terms. I got to write a paper to a conference and since it's my very first paper I was searching for some tutorials on youtube for 'writing a related work section in the paper'. What I found was mainly related to Literature Review. So I guess these two things are almost the same. Also, as it was said previously Literature Review is more frequent in thesises.
Maybe you may find this article useful https://guidetogradschoolsurvival.wordpress.com/2011/04/08/how-to-write-related-work/
at least for me, it was. Good luck!