If you are going to create a two dimensional drawing that has one view, you can create the drawing and its annotation entirely in model space. This is the traditional method for creating drawings with AutoCAD..
Paper space is a sheet layout environment where you can specify the size of your sheet, add a title block, display multiple views of your model, and create dimensions and notes for your drawing.
With the Sheet Set Manager, you can organize drawing layouts into named sheet sets. The sheets in a sheet set can be transmitted, published, and archived as a unit.