1)
The Channel is the secure communication channel you get, when you establish an SSH tunnel between trusted computers. Network is the physical network of machines (computers, routers, switches) transporting the data. The data is sliced into packets, that are send across the network towards the destination machine.
You may imagine the channel as a virtual pipe secured through encryption.
Everything, that goes through that virtual pipe is transported as encrypted packets using the underlying network.
2)
Most time you can't trust the network because you don't have full control over all machines.
If someone has control over a machine transporting (forwarding) your packets, he can read or alter them.
To protect against such attacks you use encryption, like SSH. Encryption means to alter the cleartext in a way, that you can only get it back, if you have the key.
To get a secure channel over an unsecure network, you have to do 2 things:
- Verify you are talking to the right machine/person.
- Establish secure (encrypted) channel, using a key nobody else knows (shared secret)
To achieve these goals, SSH uses public key cryptography on both ends.
To be sure you are talking to the right machine (1.), you have to check the fingerprint.
After that both ends negotiate a shared secret key used to encrypt the data.
For that usually Diffie-Hellman is used.
Because you verified you are talking to the right communcation partner and you securely exchanged a shared secret key to symmetrically encrypt the data, nobody can alter or read your communcation anymore. You have a secure channel over an insecure network.
Sure; There are tons of access points ( i.e. routers ) that provide "guest networks" as an option. – Ramhound – 2014-02-19T02:03:18.097