Yes, they are both twisted. lol. Both are usually 24 AWG copper conductors. The first difference is in the transmissions frequency they can achieve. Cat 3 is suitable up to 16 Mhz while Cat 5 is 100 Mhz. Cat5E up to 200 Mhz. Performance gains is the primary difference. Cat3 up to 10BaseT and 16 Mb Token ring, although I have seen where it is not actually rated but to 4 Mb token. Perhaps interference plays a part but that is more a concern of shielded vs unshielded.
CCNA, MCSE, A+, Cisco Certified Wireless Field Engineer