A component must be of a type that belongs to a model. For the “Small application model” example, the top-level components can be of type Application. If the application has any child components; they can only be of the type Service.
Each component can contain metadata, including custom fields and a description. The description is the main content of a component or just “plain text” via the Rich Text editor. The Rich Text editor is shown in the Pages view by default; you can open the markdown editor from the Top Bar and watch your edits appear in real-time in the Pages view.