This is where you'll control some basic settings on your site like the Site Title & Tagline, set your time zone, url format, define the homepage, etc.
When logged in you'll notice an admin bar at the top while viewing the site. This allows you to more easily edit pages as navigating through your site.
The difference between posts and pages.
Wordpress pages are the pages people will primarily navigate to on the site. Permanent content sections with various layouts and content modules. Posts are generally used more for blogs, news, events. More time sensitive content.