Uh... I've watched a video from @ScriptGuider on how to make a Custom Chat. I really don't understand very well a few parts of what he wrote, so I would appreciate an explanation of some bits of code that I'll indicate. As I want to learn on how to FilteringEnabled, I understand the structure in general on how it works, but there is parts that I don't understand, so I hope I get some more understanding of this after this post!

ServerChat > ServerScriptService

--\\ Services
local RepStorage = game:GetService'ReplicatedStorage'

--\\ Remotes
local ChatEvent = RepStorage:WaitForChild'ChatRemote'

--\\ Remote event
ChatEvent.OnServerEvent:connect(function(Client, Request, Value)
    Request = Request:lower()
    if Request == "chat" then
        ChatEvent:FireAllClients("chat", Value, Client.Name)
    end
end)

ClientChat > StarterGui

--\\ Services
local RepStorage = game:GetService'ReplicatedStorage'
local Players = game:GetService'Players'
local StarterGui = game:GetService'StarterGui'

--\\ Remotes
local ChatEvent = RepStorage:WaitForChild'ChatRemote'

--\\ Client stuff
local Client = Players.LocalPlayer
local Mouse = Client:GetMouse()

--\\ GUIs
local Chatbar = script.Parent
local ChatFrame = Chatbar.Parent

--\\ Chat messages
local Chats = {} -- Why is this Chat table empty?

--\\ Push messages
local function PushMessages(Size) -- How does this argument identify himself as the Size of the GUI?
	for i,v in pairs(Chats) do
		v.Position = v.Position - UDim2.new(0,0,0,Size)
		if v.Position.Y.Offset  < -ChatFrame.AbsoluteSize.Y then
			Chats[i] = nil
			v:Destroy()
	end
end

--\\ Create message
local function CreateMessage(Message, Speaker) -- What are the argument's utility here?
	local Label = Instance.new("TextLabel")
	Label.BackgroundTransparency = 1
	Label.TextXAlignment = "Left"
	Label.TextColor3 = Color3.new(1,1,1)
	Label.Font = "ArialBold"
	Label.FontSize = "Size18"
	Label.Size = UDim2.new(1, 0, 0, 25)
	Label.Position = UDim2.new(0, 0, 1, -25)
	Label.Text = tostring(Speaker) .." : " ..Message
	PushMessages(Label.Size.Y.Offset)
	Chats[#Chats+1] = Label -- What does this line do?
	Label.Parent = ChatFrame
end

Mouse.KeyDown:connect(function(Key)
	if Key:byte() == 47 then
		Chatbar:CaptureFocus() -- CaptureFocus() Is a function of the Mouse?
	end
end)

Chatbar.FocusLost:connect(function(Enter) -- Does the Enter argument identify himself as the Key:byte() that's equal to Enter?
	if Enter then
		if Chatbar.Text == '' then
			return
		end
		ChatEvent:FireServer("chat", Chatbar.Text)
		Chatbar.Text = ''
	end
end)

ChatEvent.OnClientEvent:connect(function(Request, Message, Speaker) -- What are this arguments for?
	Request = Request:lower()
	if Request == "chat" then
		CreateMessage(Message, Speaker)
	end
end)

StarterGui:SetCoreGuiEnabled(Enum.CoreGuiType.Chat, false)

My questions about this are:

What does OnServerEvent function do?

Is it a communication between the Server and the Client?

What does OnClientEvent function do ?

Is it a communication between the Client and the Server?

I'll include commentary questions inside the script.