After playing around a little bit, I found the answers.
Here's how I solved it.
Make sure you have created variations first. Since I am working on "English" and "Arabic" websites hence I have already created these two variations. You will need to set one of the variation as "default". In my case it was English.
Now when you create a new page in English, click on "Publish" in ribbon above. There you will see two options "Update" and "Create".
"Update" means a new page in Arabic will be created with same name and content (which you can edit later on) as English. But it is not created as soon as you press the button. When you press this button, a timer job runs after some time which does this for you. That job is defined in "Central Administration". I don't remember the name of that job at this time but when you press the button, you will get message on screen something like
Variation Job Definition will run after 30 minutes bla bla bla.... If
you want to run it immediately then please go to "Monitoring" and then
to "Check job status" in "Central Administration", click on that job
name and then press "Run" button to run it immediately.
So basically you need to go into Monitoring section of CA and then run that timer job name of which you see in screen.
This is what happens when you press "Update" button. When you press "Create" button then a new page is created with new name and content. I haven't used this option yet but I guess it follows the same path as "Update".
And no content will not be automatically translated from English to Arabic, you will have to do it yourself.