Should I respond differently to drafts than to finished work?
Absolutely. For one thing, though you very well may want to warn students about the sort of fit and finish you’ll expect in final work, drafts are thinking documents for most writers, so sentence level issues aren’t usually very important here. Expect polish later.
But the most important thing about responding to drafts is that while end comments on finished work are often written to justify or support a grade – to let student-writers understand a text’s shortcomings – comments on drafts should be more constructive and speculative. Like: I’m not sure I understand the connection between your ideas here – perhaps you mean that… Or: You seem really committed to this idea, which is wonderful. But I worry that this has been so well-established that it’s no longer worth arguing. I wonder if you might consider building instead around the more narrowly defined discussion you begin on page 3. Or: This is a really great insight, and I love how you respond to the previous arguments on this. But you need a really good example. Have you heard about what’s been going on in X or Y? Or even: I suspect you’ve chosen this topic because it seems manageable and safe. But I think there are lots of more interesting and important issues you could consider here. What about what you brought up in class last week?...
When commenting on drafts, imagine yourself in an informal conversation with a colleague you know well. Bounce some thoughts around, ask lots of open-ended questions, connect the idea to other discussions you’ve heard and examples that come to mind. Remember that the purpose here is not to pass judgment but to generate ideas.