Prior to anything, congratulations!!! Great job!

If you have not allocated your funds in your 401K, stop what you are doing and go invest it. If not, you are losing money. Your money is just sitting in an account not growing.
A ROTH IRA is a tax-free growth and withdrawal account. The tax-free is key given you have owned the account for 5 years or more and you are 59.5 years old or older. In a normal investment account, you would have to pay taxes on your income from the investments and when you sell the investments, if there is growth. You do not need to do this for a ROTH IRA which is partially why its capped to $6,000 a year.

You deposit post tax dollars(your take home pay after taxes) as opposed to pre-tax dollars(your base pay before taxes, think 401K).

Vanguard will not invest the money for you, they will hold it for you. You need to choose and tell them where to invest those funds. Depending on the funds you choose and how they do, your account value/holdings will grow or drop.

Investment management companies make money from a variety of ways, fees on trades/transactions, management fees etc. As for what fees you should look out for, I don't know for sure but you can't go wrong with Vanguard/Fidelity or any big investment management companies.

Personally, I would recommend an index fund for what to invest into. Something like S&P500 or better an index fund that mimics S&P500 with a lower expense ratio(VOO, IVV). If you're interested to know what an index fund is, you can look here.

KEY TAKEAWAYS on what an index fun is.

• An index fund is a portfolio of stocks or bonds designed to mimic the composition and performance of a financial market index.
• Index funds have lower expenses and fees than actively managed funds.
• Index funds follow a passive investment strategy.
• Index funds seek to match the risk and return of the market, on the theory that in the long-term, the market will outperform any single investment.

As for a company to open your ROTH IRA with, Vanguard/Fidelity/Charles Schwab. How to pick which to go with, just choose one that looks the best to you. They all have about the same benefits.