How are bubbles formed when heating water? My thinking is that bubbles are formed due to the dissolved gases in water. Consequently, upon heating, bubbles are formed and do not remain intact with water molecules, and thus the bubbles are formed. And since the bubbles are less dense than water, they goes up and pop due to air pressure. Water vapor is then formed in the above air. Is this all correct?

I have researched this topic and it's very difficult for me to understand. Please explain it as if you're explaining it to someone who knows very little about chemistry.
Saying that the liquid is converted to bubbles is not correct. The liquid simply becomes a gas (so inside the bubble there is the gas phase of your liquid) this is a phase transition and depends on the pressure and temperature of the portion of liquid close to the bottom of your container.

The points where the bubbles appear depends on the local variations of temperature and pressure.