What is a "Contract?"

It's the container for all the variables, functions and state of the blockchain portion of your application.

This is a fully functioning smart contract with 1 method called hello that takes no arguments:

export function hello(): string {
  return "Hello, World!";
}

From within this contract method you can also access the blockchain execution context by importing the context object from near-sdk-as. This gives you access to blockchain data like the sender who signed the original transaction that caused the execution of this contract method. or the contract's name via contractName.