Learning to Talk

You know, the English Language is a tricky thing. I've been thinking about it a lot lately because I'm trying to help Emery learn it, and I've been watching carefully how she picks things up. But there's a lot to learn! It's truly amazing that a child's mind is able to sift through so much confusing information so it can make sense.
Let me give you an example. Emery can hand me an object and I might say any of the following things about it:
pink
round
smooth
cold
ball
big
heavy
polka dots

And several more. And with her rudimentary language skills she has to decide whether I'm telling her the color, texture, weight, category, temperature, size, or name of the thing.
She also has to be able to tell that a cartoon picture of a horse, a plastic molding of a horse, a real horse out the car window, and daddy on his hands and knees pretending to be a horse are all supposed to represent the same thing. This is true for all representations of horses of all colors and spots, unless the horse is white with black stripes... in which case the horse is called a Zebra.
She loves cheese (which I have mentioned in several previous posts) and is therefore confused when I talk about cream cheese, cottage cheese, macaroni and cheese or anything else that has cheese in the name but doesn't even vaguely taste or resemble the thing she currently knows as cheese.
She knows that two means the number after one, but it also means "also" as in "I'm having watermelon, do you want some too?" But it also has several other meanings and nuances of meaning.
How on earth do we figure all this stuff out as kids? How do we process it? It's just so much information it's completely overwhelming! If you think about how much sheer information a child has to process, starting from scratch, to understand language it is truly astounding that they can master it in only a few years.