What does 'return' do and how can I use it in my games?

Functions aren't just reusable chunks of code. They can also "return" values. A (basic) example is this:

function addfive(n)
    return n + 5
end

local ten = 10
local fifteen = addfive(10)

print(ten, fifteen)

Returning is not limited to numbers. You can return anything. How about this function that finds a part which has the color "Really red"?

function findRedPart()
    for _, v in pairs(workspace:GetChildren()) do
        if v.BrickColor.Name == 'Really red' then
            return v
        end
    end
end

local redPart = findRedPart()
redPart:Destroy() -- i hate red parts!

Or this function that returns a table of red parts???

function findRedParts()
    local redParts = {}
    for _, v in pairs(workspace:GetChildren()) do
        if v.BrickColor.Name == 'Really red' then
            table.insert(redParts, v)
        end
    end
    return redParts
end

local redParts = findRedParts() -- now i can have all the red parts and destroy them all

The oppurtunities are limitless...

Though I'm sure someone else is gonna explain it better than me, that's the best I can do. I hope this helped a little.

The return keyword can do either 1 of 2 things or both things:

1. Ends the current thread function

2. Makes a function return a given value

If you give return nothing to return, it'll just end the function:

script.Parent.Touched:Connect(function(hit)
    if game.Players:GetPlayerFromCharacter(hit.Parent) then
        print(hit.Parent.Name)
    else 
        return -- The function would end here
        print("nothing found")
    end
end)

If you give return a value, it'll make the function return that value AND it will still end the function:

function GetTouchingPlayer(hit)
    if game.Players:GetPlayerFromCharacter(hit.Parent) then
        return hit.Parent.Name
        print("player found") -- This will not print because the previous line ends the function
    end
end
script.Parent.Touched:Connect(function(hit)
    local var = GetTouchingPlayer(hit)
    print(var)
end)

return cannot be used to end statements.