The Android toolkit creates a lot of fluff when you generate new projects which can be understandably confusing for new coders. Just realise it's there to give you clues about things you need to learn
First question; Fragments
are little bits of UI. They are used to reuse components or glue individual components together. This has become all the rage lately because it encourages a DRY approach to your UI layouts. It's been a while since I created a project from scratch but it you have a look at MainActivity you will see references the Fragment and code to add it to to Layout.
Second question; all your source code lives in the /src folder. The /gen folder contains the auto-generated files such as compiled classes and the all important R.java which gives you programatically access to layouts and drawables. You will *never* need to work in /gen and it can break the project if you try to, so just stay away from it (occasionally you may do a Project -> Clean which regenerates /gen).