A composition is the timeline you want to work with - like a sequence in Premiere. When you start, each project has probably just one composition and it feels like the project is the composition. But when your projects get more complex, you start having several compositions for different parts of your project. You can even use some compositions as layers in other compositions to structure your project.
To add a bit more depth to your projects, you often want your text to be 3D. In After Effects, you have different options to achieve this and each of them has some advantages. So what option is best for you really depends on your project. Here are the pro's and con's for each of the options.