In the case of a non-native English speaker using an incorrect word that is not particularly close to the intended word (whether I understood the intended meaning or not), I typically ask something like:
Did you mean [x] when you wrote [y]?
or, if I'm a bit closer with the person to whom I'm speaking, something like:
That word seems a bit odd to me there. What are you intending to express? [this is an invitation for circumlocution, to help identify the "best" and "most natural-sounding" word, even if I'm already pretty sure what that is]
I have appreciated such correction in learning other languages, especially in written communication that I can reference later. My rationale is that I want to become more fluent in those languages, and using an obviously incorrect word (in a way that native speakers in particular do not) is the opposite of that. Every interaction I have in non-English languages is one I view as another step in learning and refining my abilities.
I, personally, don't find it a rude action to be corrected on the spot and in fact I prefer not to be allowed to get used to making obvious mistakes. When offering such correction to others, I try to keep three things in mind:
Scale: The better the other person is at English, the more a correction can be seen as "polishing" their English skills, rather than wholesale criticism of their ability. Someone coming off of a single semester of learning English will make lots of mistakes, and probably won't benefit from having every one of those pointed out to them. Corrections should be geared more towards helping them master what portions of English they've already studied, not piecemeal instruction in fluent communication.
Frequency: If the other person makes four errors per sentence, their problems go beyond what in-the-moment correction can really handle. If providing correction would morph the conversation into an English lesson, it will completely derail that conversation. If person A wants to talk about a movie they saw, and all person B wants to do is point out formal grammar errors, then it doesn't seem like a conversation between A and B is really possible at that moment.
Formality, Detail, and Ability: Corrections in casual English use are probably best delivered from a "native speakers would say it this way" perspective rather than a strict grammatical one. A discussion of why a given verb must take an object in a given usage may be less helpful than simply pointing out that native speakers would use it with an object. The latter is directly helpful, while the former requires a formal grammatical framework that native speakers probably don't use (at least in English, in the U.S.). Finally, be sure you're right about your correction, or at least hedge ("maybe that's used regionally...")-- being pedantic and wrong is extremely irritating for everyone involved.
There are exceptions to these. Some social relationships are built around improving language skills (especially via video chat or with exchange students, etc.), and frequent correction is expected and desired in relationships like that. If someone has explicitly pointed out that they want to improve their English, more frequent and detailed correction is probably more polite than eschewing it, as that person has indicated that it is something they want.
Edits to the question have changed what it is asking, and it is no longer about simple spelling errors but rather about word choice by and vocabulary of non-native English speakers. This section remains for posterity, but is no longer well suited to the question as it is currently constituted.