It's filling a 100x100 'grid' with tile '0' in this case.
Yes, just filling the whole map with solid tiles. If your map is big, you can change the numbers to 10000x10000, it doesn't need to be the exact width and height.
The next loop is looping for each tile on the obstacle tilemap. If your obstacle tilemap is 6400x3200 px, then the loop will run 100x50 times.
It checks if each tile on the obstacle tilemap is overlapping the main tilemap. If it does, the tile on the obstacle tilemap is erased.
My last question about it is the x on the layout drawn with the obstacle tile. Is that just for illustrative purposes?
This is just for you to see that there is another tilemap in the layout editor.