Hibernate provides object relational mapping and allows working with data at the object level rather than directly with SQL. It abstracts the underlying database, handles change detection and caching. The session factory handles connection pooling and caching of mappings. The session represents a unit of work and tracks changes to objects, flushing updates to the database at the end of the session. The first level cache tracks changes to objects within a session. Query caching caches query results to improve performance. The second level cache caches objects beyond a single session.