The picture below is from the Handbook of Model Rocketry by G. Harry Stine, which is one of the original and best introductions to hobby rocketry. This is a good book to start with and is currently in it's sixth edition.
This Picture Shows a typical model rocket. All of the parts in this picture are usually part of every rocket. Whether small or big, all rockets share these basic parts. The bigger higher power rockets usually include electronic bays with Altimeters and devices to deploy parachutes. There are many different rocket configurations, but most resemble the "Rocket Shape". Rocket kits can be as small a couple of inches tall (Estes Mosquito) to several feet tall like the Big Kahuna (19.5 feet tall).
Info and picture above were provided by John Coker Please visit his web site at: http://www.jcrocket.com
Every model rocket has certain basic features. A rocket has a nose cone at the top. A body tube and motor mount. A system of fins to keep it on track and it has an engine to give it power. Usually housed in the body tube is a recovery system and recovery wadding (fireproof paper) inside the rocket to keep the recovery system from getting burned or singed from the ejection charge.
Model rockets mostly come from a kit where all the parts are precut and all come together in bag. If you buy a kit, all you need to have to finish the rocket is white or wood glue (Elmer's), a sharp hobby knife, pencil, sand paper and a place to work with these materials.
Scratch built rockets are rockets that are built from scratch. You should have design on paper or from software to use as a blueprint or map of how you want to have you model look. Sometimes these designs look funny or really cool. Some fly really well. I have even seen a potato with a Estes motor just shoved into the end and fly. Some of my best rockets have been scratch built. I prefer to build my own rockets. Sometimes I see a rocket that I like from maybe a kit or I like one that someone built. Then I try to build it myself with no instructions, just using RockSim just to see if I can. Building my own rockets for me is very rewarding. Please note that just building a scratch built rocket can be unsafe. There are forces at work when a rocket flies through the air. You need to know the center of pressure and the center of gravity are on a rocket. Then they need to be in the right place. As a rule of thumb, the center of gravity is 1 body diameter in front of the center of pressure. Please be sure to do some research and ask questions before building your own scratch built rockets.
Some of High Power Rockets (HPR) are built from scratch. HPR's usually require stronger materials than smaller model rockets due to the stress the HPR motor can place on an airframe. Some materials that are used in HPR's are thicker body tubes, fin and centering rings made from aircraft grade plywood or G10 fiberglass, recovery systems made from rip-stop nylon and tubular nylon shock cords. Construction materials include epoxy, fiberglass, threaded steel rods and sometimes metal brackets, all for strength. Keep in mind that high powered rockets use epoxy and other high strength material to hold them together. They also require more tools and more thought. HPR should be built with a lot of thought and you should have sufficient rocket building knowledge before building a scratch built HPR. Even some HPR kits require very good building skills.