Yeah, the amount of advertising GoDaddy constantly shoves in your face can make the process confusing. Sometimes I wonder if they do that to trick people into ordering things. To answer your question, unless you signed up for some sort of special package deal, you need to purchase hosting separately.

I wouldn't recommend getting hosting with GoDaddy, however doing so would probably make things easier for you in that you wouldn't need to figure out how to change your nameservers to point to hosting located elsewhere. This article by Agency Byte might help you understand things a little better: How Website Hosting Works (in Plain English)

Digi

As far as website hosting providers go I have found fatcow.com to be the most reliable and fair priced. I have had experience with numerous others and none were comparable to fatcow.

- Cyurk

I use webhostingpad for my website, and I've never had any complaints. They offer a lot of features, their help section is very, well, helpful, and their prices are fair. Regardless of what host you use, your experience will probably be a lot smoother if you use FTP software to upload files to your site (FTP allows you to drag and drop files from your desktop, and also allows you to upload several dozen files at once) vs. logging into your site's CPanel and uploading files one by one using its interface.

The FTP I use is Filezilla, which is very popular. (and free.) For more about it, check here: http://filezilla-project.org/client_features.php

we buy domains from easyhosting.com
You get the web address. And hosting is extra.
We use a private freelancer (who is local) to host our sites as then we don't have to deal with crazy permissions and site stuff with big companies.

You want to host separately. Keep as much as you can away from GoDaddy.

You called it, GoDaddy has the worst, most cluttered garbage site ever. xD Once you register a domain with them, they'll also spam you for renewals for at least half a dozen years after you've canceled their services and moved on with somebody decent. They're greedy, annoying pigs.

I would suggest either namesecure.com or namecheap.com for your domain registration. Namesecure is my fave but they don't accept PayPal, which is why I now use Namecheap for their flexible payment options (they even let me keep a charged account with them, which is very convenient). I've got about 10 domains with namecheap, from .com to .ca.

I won't suggest a webhost because I offer my own hosting services and don't want a conflict of interest.

I have my domain with DomainSpot and my hosting with UCWebhost. I have not had any problem with either. DomainSpot used to answer the phone and give live tech support, don't know what the policy is now. With UCWebhost I get e-mails if there's been downtime (not often) and that my account will be credited, in accordance with their 100% uptime guarantee. I just got a bill for $62/yr.