Looking at your code in detail:
kernel = np.zeros((2*radius+1, 2*radius+1))
y, x = np.ogrid[-radius:radius+1, -radius:radius+1]
mask = x**2 + y**2 <= radius**2
kernel[mask] = 1
The first line:
kernel = np.zeros((2*radius+1, 2*radius+1))
creates a 2-d array of zeros, with a center point and "radius" points on either side. For radius = 2, you would get:
# __r__ +1 __r__
[ 0, 0, 0, 0, 0, ] #\
[ 0, 0, 0, 0, 0, ] #_} r
[ 0, 0, 0, 0, 0, ] # +1
[ 0, 0, 0, 0, 0, ] #\
[ 0, 0, 0, 0, 0, ] #_} r
Next, you get two arrays from the open mesh grid created by numpy.ogrid. Mesh grids are a "trick" in numpy that involves storing a "parallel" array or matrix that holds the x or y coordinate of a particular cell at the location of that cell.
For example, a y-mesh grid might look like this:
[ 0, 0, 0, 0, 0, ]
[ 1, 1, 1, 1, 1, ]
[ 2, 2, 2, 2, 2, ]
[ 3, 3, 3, 3, 3, ]
[ 4, 4, 4, 4, 4, ]
And an x-mesh grid might look like this:
[ 0, 1, 2, 3, 4, ]
[ 0, 1, 2, 3, 4, ]
[ 0, 1, 2, 3, 4, ]
[ 0, 1, 2, 3, 4, ]
[ 0, 1, 2, 3, 4, ]
If you look at them, you'll realize that Y_grid[x][y] == y and X_grid[x][y] == x which is so often useful that it has more than one numpy function to support it. ;-)
An open mesh grid is similar to a closed one, except that it only has "one dimension." That is, instead of a pair of (for example) 5x5 arrays, you get a 1x5 array and a 5x1 array. That's what ogrid does - it returns two open grids. The values are from -radius to radius+1, according to python rules (meaning the radius+1 is left out):
y, x = np.ogrid[-radius:radius+1, -radius:radius+1]
So y is a numpy array storing from e.g., -2..2 (inclusive), and x is an array from -2..2 inclusive. The next step is to build a boolean mask - that is, an array full of boolean values. As you know, when you operate on a numpy array, you get another numpy array. So involving two arrays in an expression with a constant produces another array:
mask = x**2 + y**2 <= radius**2
The value of mask is going to be a 2-color bitmap, where one color is "True" and the other color is "False." The bitmap will describe a solid circle or disk. (Because of the <= relation. Remember that x and y contain -2..2, not 0..4.)
Finally, you convert from type Boolean to int by using the masking array as an overlay on the kernel array (of zeroes), setting the zeroes to ones whenever the mask is "True":
kernel[mask] = 1
At this point, kernel looks like:
# __r__ +1 __r__
[ 0, 0, 1, 0, 0, ] #\
[ 0, 1, 1, 1, 0, ] #_} r
[ 1, 1, 1, 1, 1, ] # +1
[ 0, 1, 1, 1, 0, ] #\
[ 0, 0, 1, 0, 0, ] #_} r