Speakers are air pistons that move back (on the negative cycle of the signal) and forth (on the positive cycle), creating different degrees of air pressure at different frequencies.
The amplifier (either separate or built-in your radio), produces electrical impulses that alternate from positive and negative voltages (AC). This current reaches the voice coil inside the speaker, creating an electro-magnet that will either be repelled, or attracted by the fixed magnet at the bottom of the speaker.
The voice coil is attached to the cone, moving it back and forth, creating sound. The surround (rubbery circle that joins top of the cone and metal basket) and the spider (usually yellow corrugated circle joining bottom of cone to magnet) make the cone return to its original position.
Speaker Sensitivity, measured in dB, is how loud a speaker plays (usually 1 Watt, 1 meter). A higher Sensitivity rating means that the speaker will play louder using the same power as a speaker with a lower rating.
The back and front parts of the speaker should be isolated from each other. When the front of the cone is pushing air, the bottom is pulling air, creating a canceling effect. Ideally every speaker should be in an enclosure. If you are mounting a speaker in a big hole, make sure you build a panel to isolate the front and back of the speaker (baffle).