When the guitar string vibrates, it causes a chain reaction with the air molecules around it; they all start vibrating as well, radiating outwards. Our Y-axis measures displacement of air molecules. It's a measure of a sound wave's loudness.
It measures how much a molecule is displaced from its resting position. Amplitude can be thought of as loudness. The more the air molecules are displaced, the louder the sound seems to us.
Frequency is a measure of how many times the waveform repeats in a given amount of time. The common unit of measurement for frequency is the Hertz, abbreviated as "Hz", which represents the number of repetitions per second.
When a waveform has "side effect" frequencies, we call them harmonics.