The bullet in its present form was introduced in the UK in 1949 and it was a 350. This was the model which was introduced to India in 1955 and which was later produced there. The 500 came later.
The 500 is faster than the 350 but not really all that much faster. Neither is really a fast bike, though it all depends on how you define "fast." For example - I've just been to the shops for my wife and took the 350. When dealing with the job of going through town to the shops and back, the 350 is "faster" than my 2 litre fuel-injection car.
The 500, as IndianaBulleteer says, produces more torque and pulls harder. In the UK in the 1950s, people would have bought a bike like this to use the extra power to pull a sidecar, not for extra speed.
Some people think that the 350 runs better, as that displacement, in that frame, and with that suspension, is what was originally designed.
The Bullet is pure, unadulterated fun. Speed is actually less important, I think.
Tom