In general terms, each server has an (or various) ID, which is known as IP. When you register a domain name, you have to configure it to redirect that domain to the IP of our server, which is where you find the folder that stores the website.
There are many types of web hosting, from small spaces for a simple website, to special plans designed for large content portals.
The hosting plans are becoming more advanced and offer more services: plenty of space, email accounts, databases, backups … If you need to hire a hosting plan, my recommendation is to contact one or more companies providing this service. Tell them what kind of website you need to host and what other services you’ll need (e.mail accounts, databases, etc..). Generally, the hosting company also provide domain registration.
Another option is look for advise from a good web designer. He’ll know much better about the web hosting industry. He will recomend a good hosting company and, within it, the plan that best suits your needs.