Many clubs with youth systems loan out their younger players to teams in lower leagues to give them first team match experience, which they would not get in the at their parent club. Team often loan in players to either provide cover during an injury crisis, or to improve the team temporarily without having to spend money on a transfer.
Clauses are the agreements between the two clubs involved in the loan. For example, many teams assign the clause that they cannot play against their own team, that they cannot play in the cup competitions, or that they can be recalled at any time. Sometimes the club loaning the player in will ask for a clause enabling them to have the first chance to buy the player, if he is transfer-listed.