Abstraction hides the internal implementation details of functions and classes, allowing them to be used in a simpler way. It allows focusing on what a function or class does rather than how it works. Abstraction also helps protect sensitive code details and allows thinking of complex things more simply, such as representing a car with an abstraction of its basic components. Abstract base classes define a common interface for subclasses, making code more organized and reusable when working in teams on large codebases. The abc module in Python provides tools for defining abstract base classes even though Python itself does not include the abstract class concept.