QAvimator is my favorite tool for making them. There are others though.
-The hip is the part that moves and rotates the entire avatar.
-The keyframe controls how your animation looks in SL. If the joint doesn't change between the keyframe and the second frame, it won't be moved by your animation in SL.
-Priority: 0-4. Don't be afraid of layering animations to get what you want. Built-in animations will encourage you to learn about how animation priority works.
-Hand and face 'animations' are morphs that you can trigger using scripts or attach to an animation when you upload it to SL. There's only a small selection to choose from, and sometimes they don't appear when the animation is triggered.
-Suggested joint movement limits.