The compass is a magnetic device affixed to the boat which tells what direction the boat is pointed. The rotating card with the numbers on it is attached to a magnet which always points to the north magnetic pole. This card lines up against a vertical pointer called a lubber line. The number which lines up with the lubber line is the boat's heading. The reading on the compass must be corrected for various factors, so don't take it literally.
Variation is the difference between magnetic north and true north at a given location.
Most Puget Sound skippers ignore this and do all their navigation by magnetic courses. Be advised that this would not work if you tried to do it while sailing some long distance, over which the variation changed. Deviation is the error in the compass reading caused by magnetic sources on the boat or the crew. It varies with the course sailed. Modern compasses have devices on them which make it possible to compensate for the magnetic sources on the boat, but even they cannot correct for some crewmember's rigging knife, and besides, neither of the club compasses are compensated at this time, although one of them could be.