What are you trying to achieve? Each of these has a different use:
The "Add website" is how multiple sites can be supported on the same server. Thus you could have "www.mysite.com" and "anothersite.mysite.com" using different IPs on the same server but accessing completely different files if you so wish.
The "Add virtual directory" is how you add another folder into your current site to create a "www.mysite.com/thisfolder" routing to a particular folder.
The "Add application" is used when you want to add that folder but run it in another application pool. This can be useful if you want to have separate processes for different parts of a site.
IIS.net would be a site about how to configure and use IIS. Scott Gu's blog is also a good resource for some points in IIS and ASP.Net if you choose to go into that realm of things.
You do understand that the physical path is asking for the root of the website, right? Where should the site start if one is looking at the file system on the server? The binding is what IPs, ports and host headers should be used for this site. Is there a specific IP, port or name you intend to use? If so, this is where that gets set. If you want 5 websites, then you create 4 additional sites besides the default one and configure as needed, perhaps you run each site on a different port. For example, if you type in "http://localhost/site1" and "http://localhost/site2" are you getting into a couple of what you think are different sites even though both run under the localhost site?
If the admin section is in a different part of the file system, yes. The idea of a virtual directory is to allow for the website to use files from multiple places on the system's hard drives. For example, your website could have the "wwwroot/mysite" for its initial location and then reference another disk for where the virtual directory maps which could be on another drive if you wish. The idea is to have "mysite/blah" "mysite/whatever" and "mysite/here" all appear to be next to each other but they don't have to be on the server side as each directory could be mapped to a different location.
The separate processes may be useful if part of your site is less stable and you don't want that application crashing to be impacting the other application pools. Application Pools in Microsoft IIS notes:
You can run as many applications in one application pool as you
desire. However, for critical production applications, it is better
to set up one application pool per application. This allows each
application pool to have its own memory space and errors within one
application will not impact other applications running in other pools.
Microsoft .NET Framework does impose a limitation that each
Application Pool can only run one version of the Microsoft .NET
Framework. So if you have some applications that require Microsoft
.NET Framework 1.1 and others that require version 2.0, you must
create two different application pools. Note that Microsoft .NET
Framework 3.0 and 3.5 are really Microsoft .NET Framework 2.0 from the
perspective of all web applications. So there is no requirement to
separate applications using version 2.0, 3.0 or 3.5 of Microsoft .NET
Framework into separate application pools.
Iron Speed recommends running each application in its own application
ASP.NET Web Garden - How Many Worker Processes Do I Need? also has some answers in terms of worker process stuff that may be of some use from SO. In a way, splitting up a website into multiple applications is like splitting up code into multiple DLLs versus having one big executable. It takes some experimentation and what works in one place may not work in another place.