1. It's CLR, not "crl". It is the Common Language Runtime, a core part of the .NET framework. Your C#, F# or Visual Basic code (or any managed language, including sections of Managed C++) are compiled into CIL, the Common Interpreted Language (also known as MSIL), which the CLR interprets and executes. It's basically... a high level assembly.
2. Your source code is compiled into CIL via. the MSIL compiler (ilasm.exe). When you run your program, the JIT compiler (just-in-time) compiler compiles it into low level machine-readable code and it is executed by the CLR. Well, that's kind of how it works.