Welcome to health care magic. 
1.There is a disc between the 
vertebral bodies helps as a 
shock absorber effect, the disc contains maximum percentage of water, due to degenerative changes when the water content / hydration is lost the disc slips / bulges.
2.In your case at the level of C4-5 the disc bulged with broad base - its more of surrounded bulge. 
3.This bulge is causing the pressure effect on the 
thecal sac with chord within.
4.The subarachnoid space is where the CSF space - called. 
5.In this case exercise and 
physiotherapy will be tried followed by operative / interventional treatment. 
Good luck.
Hope i have answered your query,
any thing to ask ? do not hesitate to ask.
http://doctor.healthcaremagic.com/doctors/dr-ganesh/62888