A solar flare releases a large amount of free magnetic energy through magnetic reconnection in the corona. Most of this energy is quickly deposited in the lower atmosphere, producing flare ribbons emitting in optical, ultraviolet, and infrared photons. Anchored to flare ribbons are a multitude of flare loops in the corona emitting in X-ray and EUV wavelengths for tens of minutes. High-resolution observations have shown that the size of an individual flare loop or their foot-points on flare ribbons can be smaller than 100km, and a solar flare is a collection of numerous small-scale, or elementary, energy release events. In this talk, we will review recent progress in high-resolution flare observations, and discuss magnetic and hydrodynamic models used to study mechanisms governing magnetic energy release and heating and cooling of flare plasmas from the chromosphere to the corona.