What exactly is a kernel of an operating system? What does it do? I tweaked my linux kernel a couple of times but didn't know why did I do it or what did it change.
The kernel is the central part of the operating system. It handles the 'behind the scenes' tasks so that your user space application (end user application) may run without knowing the inner details and complexities of the hardware.
Most importantly, a kernel performs:
Interrupt handlers
+ more.
You can read more about the inner working of Linux kernel in the wonderful book "Linux Kernel Development" by Robert Love.