Making a selection in a channel is much the same way as making a regular selection, except it's on a channel and not on the combination of all the channels that make up your image. To bring up the channels panel, choose: Window > Channels.

Blending mode controls how the layer interacts with other layers. For example, the blending mode "multiply" looks at the color of your layer and multiplies the base color by the blend color. The result is always a darker color. Multiplying with black results in black, multiplying with white leaves the color unchanged.