The fishing pole is an equippable item that can contain one stack of bait in its tackle. You can change the contents of the pole whether or not it is equipped. Fishing poles are graded with a quality rating from zero to 100. Whether or not the quality of the pole really matters is up to debate, but a pole rated at 70 or higher will be fine, and should be relatively easy to find.
Drag the bait onto the pole to bait your hook. You only need to rebait your hook when a fish steals the bait or when your line snaps. Since you normally won't have to rebait the hook, and every fish you catch will provide some chum bait, a small amount of bait is enough to get started.
To fish, you must play this mini game where you have to hook a fish.