1.) I don't see an "archives category" on your navigation bar.
2.) First of all, you have one dynamic page where you write your posts (some people call the articles they write "blogs" and some people call the whole collection of posts on a site a "blog.") This dynamic page is called "front page," "home page," or "blogging page." The way your site (blog) is currently set up, a reader finds your front page by clicking the title of your blog. This home page is the list or compilation of all the posts you have made on your blog. Every time you add a post the "list" the "page"changes.
It's confusing that the dynamic front page is called a page. None the less, it is significantly different from any static page. Static pages are outside of the blog structure: use them for background information that does not change often. You can't tag or categorize a static page.
The blog structure is based on a dynamic, changing system where new posts are added in reverse chronological order, with the newest post on top. You can tag or categorize posts.
Categories help readers find topics of interest (also search engines use tags and categories). The other function of categories is to organize your blog. All of your posts in a particular category will be grouped together. Instead of your reader having to look through the entire list of all your posts, he/she can see a list of only the posts in a particular topic. While these category pages (sort of lists of posts) do change just like your home page changes, you can't post directly to them: you must assign a category to each post. The the wordpress blogging software will pull together all those posts into a category page: a group of posts on the same topic.