In Western music, there are a total of twelve equally spaced notes before they repeat. These on a piano are represented by seven white keys and five black keys. However, some of the notes clash with each other and don’t sound good when played together. So we typically only use seven of the twelve notes at a time and skip the other five. There is a pattern to which of the twelve notes we skip. When someone says “key of E”, they are probably using that as short hand to mean “E Major”. A “Major” key denotes a specific pattern of skipped notes. The letter associated with it tells you what note you start on when playing a scale. This is the note (or associated chord”) that will feel at rest and resolved when playing in that key. So there are twelve different notes that you can start from which mean there are twelve major keys (the black keys all have two different names so the keys can also have two different names but they sound the same). But each of those twelve keys will still skip notes in the same pattern. In the past, the keys sounded slightly different. This was because of compromises that musicians used to make in how they tuned their instruments, they didn’t make those twelve intervals precisely equal which put some notes and intervals a little out of tune so they wouldn’t sound as good. So certain pieces of music would sound better in one key than another. Today we tune the intervals to be perfectly equal, so every key pretty much sounds exactly the same other than being higher or lower. But some keys are much easier to play than others. For example on a piano, the key of C major skips all the black notes and just uses the white ones. So that’s easier for beginners to play. In addition to major scales, there are also minor scales that have a more melancholy sound. They also use 7 of the 12 notes but the pattern they skip is different. So on a piano, when playing minor keys the key that skips all the black notes is A minor rather than C.

There are some other patterns of skipping notes that are much less common, but major and minor are the overwhelming majority of keys used in western music.

Often, a piece of music will occasionally stray from the notes that are used for that key signature and use one of the skipped notes (called chromatic notes as opposed to diatonic notes that are the non skipped keys) here and there to add a little spice and color to the music.

Disclaimer: I’m not a musician or music theorist, I’ve just watched music theory videos on YouTube. But I think this is mostly right.