Every computer has a bunch of ports (1-65535 if I recall correctly), each of which is a unique entity to which a single service can bind. In layman's terms, a port is a door that one service is able to answer when someone knocks. By convention, some ports have a specific associated service (80 = HTTP, 443 = HTTPS, 22 = SSH), but there are a lot that you can just use as you deem appropriate.

If you want a service (e.g. a web server) to be accessible, you have to run a service that binds to a known port (e.g. 80), and a client has to reach out to your server on that same port. A firewall sits between your service(s) and any potential clients, much like those steel security screen doors. If that's closed, nobody gets through on that port, even if a service is bound to that port and is listening for a connection.

As a general rule of thumb, you want your firewall to block as much traffic as possible without breaking something (I.e. blocking one of your public-facing services). If you don't run any services on your computer (web services, media servers, etc.), you can probably get away with blocking all inbound traffic. without any discernable impact.