Strings in Java are immutable character sequences represented as objects of the java.lang.String class, with string literals serving as constant references to these objects. An unclosed string literal error occurs when the Java compiler fails to detect the closing double quote of a string literal, often due to missing quotes, improperly concatenated multiline strings, or unescaped special characters such as double quotes. The error can be resolved by correcting the syntax, but Java's introduction of text blocks offers a more elegant solution for handling multiline strings by reducing the need for escape sequences and improving code readability. Text blocks, introduced as a permanent feature in JDK 15, provide a cleaner and more efficient way to manage multi-line text in Java, although both string literals and text blocks have their specific use cases.