This takes place with oxygen where carbohydrate and oxygen are used as fuel for the first two minutes after which fat is burned. These are lower intensity activities.
More fat for energy is used and leads to a better ability to burn fat.
Blood vessels increase and become bigger to accommodate the oxygen being used.
It changes the composition of muscle fibers which contract slower and at a lower intensity. Aerobic activity increases this type one muscles which increases endurance and performance.
Aerobic activity increases mitochondria which improved the aerobic capacity of muscles.