I am trying to understand what is intended with closed subspace, I took the following guess:
A closed subspace $M$ of a Hilbert space $H$ is a subspace of $H$ s.t. any sequence $\{x_n\}$ of elements of $M$ converges in norm to $x \in M$ ,i.e. , $\|x_n - x\| \rightarrow 0$ as $n \rightarrow \infty$.
Is this correct?
That is correct. It is a subspace that is closed in the sense in which the word "closed" is usually used in talking about closed subsets of metric spaces.
In finite-dimensional Hilbert spaces, all subspaces are closed. In infinite-dimensional spaces, the space of all finite linear combinations of the members of an infinite linearly independent set is not closed because it fails to contain infinite linear combinations of is members. E.g. suppose the $n$th member of a basis of $\ell^2$ is $$ (0,0,0,\ldots,0,0,\ \underset{\uparrow}1,\ 0,0,\ldots) $$ where the arrow indicates the $n$th component, for $n=1,2,3,\ldots$. Then the set of all linear combinations of finitely many of these does not contain the point $$ \left(1,0,\frac12,0,\frac13,0,\frac14,0,\frac15,\ldots\right) $$ but one can find a sequence of vectors in that subspace that converges to this point.
(Note that I had to choose the coordinates in such a way that the sum of their squares is finite; otherwise it wouldn't be in the Hilbert space $\ell^2$ at all.)