Think of an American dollar bill. You can fold the note so the words “THE UNITED STATES OF AMERICA” shows the words “THE AMERICA” while hiding the words “UNITED STATES OF”. In the same way, each cell can fold its DNA to show which genes to use and which genes to not use. (For a non-ELI5 explanation look up epigenetics)
For the second question, cells can ‘talk’ to each other by sending signaling molecules that act like passing notes in class. Only certain cells can receive these signals, like only certain other kids have the cipher to make sense of these notes. There are lots of different types of signals that do different things like tell cells to divide, migrate, stick together, repel, make layers, etc. (For a non-ELI5 explanation look up morphogen signaling)
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