Definitions of Open Set and Topological Space I having trouble understanding two basic concepts in topology: (1) the definition of an open set and (2) the definition of a topological space. 
OPEN SETS
Consider a disc $A$ in $\mathbb{R}^{2}$. We have a boundary $\partial A$ (which is a circle) and an interior $\text{Int}A$. Since the boundary of a disc is a circle, we know the equation for the boundary is 
$x^{2} + y^{2} = r^{2} $
and therefore  $\text{Int}A$ can be expressed as 
$x^{2} + y^{2} < r^{2} $
Obviously,  $\text{Int}A$ is an open set and $\text{Int}A \cup \partial A$ is a closed set. So this is an example of an open set and a closed set. The problem is, this definition of open vs closed sets involves concepts that rely on metric spaces and distance functions. This confuses me because I thought a topological space was more fundamental than a metric space, so how can I use distance functions to define open and closed sets for topologies if I need the definition of a topological space to define a metric space?
TOPOLOGICAL SPACES
I understand topoloigical spaces can be defined using closed or open sets. Here, I will use open sets. 
There are two properties I am struggling to understand: 


*

*The intersection of a finite number of sets in $T$ is also in $T$.

*The union of an arbitrary number of sets in $T$ is also in $T$.


Now, consider the topology 
$\lbrace\lbrace 1\rbrace, \lbrace 1,2 \rbrace , \lbrace 1,2,3 \rbrace , \emptyset \rbrace$
For the first property, this is simple. We can easily see the intersection of a finite number of sets in $T$ is also in $T$.
My question: 
What does it mean to have an "arbitrary" number of subsets? Why not just say finite? Does saying "arbitrary" add something to the definition that "finite" does not convey? 
EDIT: To the best of my ability, I have edited the original question to clear up my confusion in terminology of disc vs circle.
 A: Too long for the comments:
You are confusing a circle with a disc. A circle in a topological context is (homeomorphic to) the boundary of a disc. A circle has empty interior, in part because it is a boundary. One can of course speak about the region of $\Bbb R^2$ that is enclosed by the circle as, in some sense, its "interior". However, when you embed a circle in say $\Bbb R^3$, this notion of interior no longer makes sense, while $S^1 \subseteq \Bbb R^3$ still has empty (topological) interior.
Furthermore, neither a circle, nor a disc is open and closed in the standard topology on $\Bbb R^2$. The circle is closed, as is the disc. You should try and convince yourself that they are not open.

There is no problem with using a metric to define a topology. And you don't need a topology to define a metric space, you just need a metric. Surely you don't need to talk about open sets to construct a function $d: X \times X \to \Bbb R$?
A topological space is not really "more fundamental," it just happens that every metric space has a topology that is compatible with the metric in some sense. This is what we should want to happen, since topological spaces are generalizations of metric spaces.
You should also bear in mind that the definition of what an open set is depends on what sets you choose to be open. There are many different ways of choosing those open sets, many of which are compatible with various other mathematical structures. In addition to metric spaces, if a set has a linear order, then we can define in a particular way, a topology on that set using the linear order. When we look at algebraic objects, like groups, it might be possible to find a topology on the underlying set such that the group operation the map $g \mapsto g^{-1}$ are continuous. (This is called a topological group.)
In fact, $\Bbb R$ with the standard topology is an example of all of these. It is a metric space, linearly ordered, and is a group under addition. Just to be clear, the standard topology on $\Bbb R$ is generated by the Euclidean metric, but can also be generated by the linear order $<$, and makes addition continuous. This single, easily defined topology allows us to use three (actually more) extremely useful objects when discussing the topology of $\Bbb R$.

Remember that a topology on a point-set $X$ is just a collection of subsets of $X$ such that the collection satisfies certain properties. Look at the abstract definition of a topology. It only requires three axioms:


*

*$\emptyset$ and $X$ are in the topology.

*That the collection is closed under arbitrarily large unions.

*That the collection is closed under finite intersections.
So that it is easier to talk about members of the collection, we call them open sets.
Observe that nowhere in the definition of what a topology is do we give any characterizations about the open sets themselves. This is somewhat analogous to how the axioms of a group make no mentions of what the group elements are, only how they interact. 
The advantage to this flexibility is that it is easy to put different kinds of topologies on an arbitrary point-set. The down-side is that often we have too many choices and the easy ones (the discrete and trivial topologies) are rarely useful or what we want (but sometimes they are!).

Let's say you have a point-set $X$ and you want to put a topology on it. Chances are that you have some additional structure on $X$ and you want to use topological tools to study it. In that case, whatever topology you pick needs to be compatible with that structure in some sense that will vary a lot between structures.
The prototypical example is the metric topology. Suppose $(X,d)$ is a metric space. From analysis we have a definition of continuity on $X$, but we also have a different definition for arbitrary topological spaces:


*

*Analytic Continuity: A function $f: X \to Y$ is continuous at $x \in X$ if for all $\epsilon > 0$, there exists a $\delta > 0$ such that for all $y \in X$, if $d_X(x,y) < \delta$, then $d_Y(f(x),f(y)) < \epsilon$.

*Topological Continuity: A function $f: X \to Y$ is continuous if for all open sets $U \subseteq Y$, the preimage $f^{-1}(U)$ is open in $X$.
Whatever choice we make of topology on $X$, we want these two definitions to be equivalent, so that we can combine the analytic and topological machinery.
The take-away of all this is that when you just have a point-set and nothing else, it's not clear what the open sets should be or why you would even need these open set doohickeys. In fact, when we make purely abstract point-set topology arguments, it doesn't matter what an open set is, since we are reasoning about them abstractly. Once we start looking at (slightly) more concrete mathematical structures, like say metric spaces or groups, we can no longer reason about open sets abstractly, since there are certain compatibility properties we would like them to satisfy. Now we need to single out a particular collection of subsets that we would like to call the open sets and show that is forms a topology.

The other sensible choice of what a continuous function is what we call an open function:


*

*Open Function: A function $f: X \to Y$ is called open if for all open sets $U \subseteq X$, the image $f(U)$ is open in $Y$.


So why don't we call these functions continuous?
The short (unhelpful) answer is because the preimage definition is what works. To give a precise mathematical reason is not easy, because essentially our choice was based on what got us what we wanted. Any good definition of continuity ought to formalize our intuitive notions of continuity and the preimage definition does that better than the image definition.
It is also worth pointing out that preimages play much nicer with set operations than do images. To wit:


*

*$f^{-1}(A \cap B) = f^{-1}(A) \cap f^{-1}(B)$, whereas $f(A \cap B) \subseteq f(A) \cap f(B)$ and

*$f^{-1}(A \setminus B) = f^{-1}(A) \setminus f^{-1}(B)$, whereas $f(A \setminus B) \supseteq f(A) \setminus f(B)$.
And since whichever one choose in the definition will be used a lot with sets and set operations, so from a practical standpoint, we kind of want the preimage to be the right definition.
A: In general the open sets in a topological space are specifically the sets we say are open: one example is the ones you gave that are the open sets with the standard topology on $\mathbb{R}^2$. We could also take the discrete topology on $\mathbb{R}^2$, in which case every set, even for example $[1,2]$ would be open. Or we could take the indiscrete topology, where only the empty set and the space itself are open and a circle like that would not be open. As you can see, the open sets are the ones we say are open (assuming they satisfy the axioms). The topology is defined by which sets you say are open.
A: The notion of a topological space is a generalization of that of a metric space in fact. Each metric space can be thought of as a topological space if you declare that a set is open if and only if each point is contained there together with some $\varepsilon$-ball around it (with respect to the metric fixed on this given set). The collection of such sets satisfies the definition of a topology. (I'd post it as a comment, don't know whether it's useful, but the thing is that I've got no rights yet to comment...)
A: You cannot always define a distance inducing the given topology -where the open sets are said to be open just because we have decided to considere them the open subsets belonging to the topology- of a topological space, i.e. a topological space is not always metrizable. By a distance inducing a topology, I mean that a distance is used to define the open subsets $G\subset X$ as those subsets of space $X$ whose points $x$ are all contained in a sphere $B(x,\delta)=\{y\in X:d(x,y)<\delta\}$ entirely contained in $S$.
As to topology $T$ that you give as an example, it would suffice to consider the union of a finite number of open subsets, but, in general, topologies where an infinite number of subsets do exist: a trivial example is the usual Euclidean topology on $\mathbb{R}^n$.
P.S.: I am noticing that you have already received some comments and answers. I leave this in case you could find something new in it.
