English of the ESV follows fairly well the order and sense of the Hebrew in v.2, but in v.3 has a better (more literally) ordered and rendered form it could take, something like so:
v.2 And on the seventh day God finished his work that he had done, and he rested on the seventh day from all his work that he had done. v.3 [my modified ESV translation] So God blessed the seventh day and made it holy, because on it He rested from all His work that God had created to be done.
You will find a few differing translations of the last part of verse 3. See below for the type of construct it is and why that is so.
The "work" found three times in the verses is the same Hebrew word with the idea of "occupation" or "business," that is the activity one is engaging in.
The "rested" is the same Hebrew word in both instances, which can have the idea of "ceased" as well. It is in the qal imperfect, so it is the state God entered into on the seventh day.
All three instances of "done" are the same Hebrew word, and the first two instances of "done" are in the perfect tense, meaning it is a completed action with continuing results, hence the "had done" translation. The final instance is in an infinitive construct with a preposition attached to it. The construct is in relation to the preceding relative clause "that God had created," which is also in the perfect tense for "create." So all three ideas of "done" are for a completed action, as is "create." The various ways the preposition and infinitive construct might be rendered accounts for variations in translation. Mine above is must more "literal."
All the preceeding fits with the word "finished," which is a piel imperfect verb referring to the action as one that is caused. So an expanded idea is "God brought to completion" or "caused it to finish."
So the answer is in the text itself:
- God finished... what? His work he had done (i.e. days 1-6).
- God rested... from what? All his work that he had done (i.e. days 1-6).
- God blessed and made holy... what? The seventh day. Why? Because that was the day He ceased His work he had done in His creative activity.
As to resting, yes, it means simply that He ceased from the activity that He had been doing the 6 days prior, which is why there is no conflict with the statement in your other question. God still "works" in His creation, He just does not work at creating in the same sense of His activity done those first 6 days.
His ceasing of this work was important enough to Him to make a commemoration of it, and ultimately put it into the law for Israel to commemorate because of it (see Exodus 20:10-11). God had done the work needed for creation to BE, and was done. Now the work would be to have it continue.