In a open system, the system is not sealed
and is not insulated
In a closed system, the system is sealed
but is not insulated
In a isolated system, the system is sealed
When a system is sealed, matter cannot be exchanged with its surrounding; when it's not sealed it can.
When a system is insulated, it cannot exchange energy with its surroundings; when it's not insulated it can.
Take a look at the figure in the middle of page 21 in the course reader.
I don't know if we've specifically discussed how energy exchanges with the system, but Wikipedia has an easy to understand explanation under the section "Mechanisms" on this webpage: https://en.wikipedia.org/wiki/Heat_transfer