Every time a transaction is made, a copy of it is stored in the blockchain. The blockchain is stored on every single computer that runs a wallet. If transactions take up a lot of space, or if a coin's technology requires a whole lot of transactions, then the blockchain becomes huge.
Blockchains can't be huge if they're to be stored on a mobile phone. So for real-world usability, a bloat-free blockchain is a central concern.
2. Please explain to me what Blockchain bloat is.
My explanation is embedded in your post. Ha ha.