Clipping mask makes an object overall shape match the path you give it (i.e. to get a gradient fill inside of some line drawing shape).

N.B. If you want to make a hole in something use compound path.

Chopping Off Areas Outside Of An Outer Frame Of Any Shape

Move the object you want to clip behind the object that will act as its mask.
Object > Clipping Mask > Make
This is not a crop – you can then move around the whole object that’s been clipped still as desired using the direct selection tool. Use Object > Clipping Mask > Release to remove it.

Using Round Corners For A Clipping Mask

The rounded corners are not applied as a clipping mask object. To make then do this to the clipping mask object first. To use them select the object and use:
Object > Expand Appearance


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