Lost is Close to Lose
This problem asks us to find similar words in a paragraph of characters. The core of the algorithm, finding whether two words are similar, is not all that difficult. We can iterate through the two words until we find two characters that differ, and then checking whether an insertion, deletion, swap, or replacement will cause the words to match. As we can only make one adjustment, this is sufficient. We must be careful to deal properly with words of different lengths. Making gratuitous use of TreeSets helps with both uniqueness and sorting.
There are not enough words that we cannot brute force through them, assuming we have removed duplicates.
Ensure to use string builders when creating the output to avoid excess time in printing if there are many matches.