Well, technically, here's the definition of 'beauty' :
- The quality that gives pleasure to the mind or senses and is
associated with such properties as harmony of form or color,
excellence of artistry, truthfulness, and originality.
- One that is beautiful, especially a beautiful woman.
- A quality or feature that is most effective, gratifying, or
telling: The beauty of the venture is that we stand to lose
nothing.
- An outstanding or conspicuous example: “Hammett's gun went off.
The shot was a beauty, just slightly behind the eyes” (Lillian
Hellman).
So, erm... 'beauty' = 'pretty', but yeah, it can also be used to
describe 'inner beauty'.
So, when someone uses 'beauty' and 'pretty' interchangeably,
nothing wrong about that! 
