observation vs looking at

observation and looking at both are nouns.

Word	Noun	Adjective	Verb	Adverb
observation	Yes	No	No	No
looking at	Yes	No	No	No

As nouns, looking at is a hypernym of observation; that is, looking at is a word with a broader meaning than observation:

observation: the act of observing; taking a patient look
looking at: the act of directing the eyes toward something and perceiving it visually; look

Other hypernyms of observation include look, looking.

observation (noun)	looking at (noun)
the act of observing; taking a patient look	the act of directing the eyes toward something and perceiving it visually; look
the act of making and recording a measurement
the act of noticing or paying attention
facts learned by observing
a remark expressing careful consideration