Rivets, it's basically digitally-encoded 20-bit audio data. There are accompanying bells and whistles that tell the audio device whether it's 2-channel or 4-channel (in consumer terms, whether it's stereo, Dolby Digital or DTS). It's also used to carry the raw digital data from, say, a CD deck to a preamp. There are three sampling bit rates in the standard. The default 48 kbps, 44.1 kbps, and one I forget but is probably 32 kbps. SPDIF is a consumerised version of an older professional standard called mumblemumblemumble. The 44.1 kbs was set by a desire to move raw CD data bitstreams around studios, 48 kbps for DAT, and 32 kbps for some other reason.
There are two cabling methods: bog standard 75-ohm coax and optical. Coax used to dominate when optical was expensive, but now optical is as cheap as chips and has other benefits such as no possibility of earth loops between devices.
Wikipedia would probably be your friend, except you state it isn't. The "optical digital out" in #2 is SPDIF over TOSlink.