Why is abstraction in lambda calculus called abstraction?
Abstraction in the context of lambda calculi means turning some part of a term into a variable. Let's do an example. Consider the following terms (which use a notation richer than pure lambda calculus):


$1 + 2$
$\sin^2(\varphi) + \cos^2(\varphi)$
$\frac1{n + 1}t^{n + 1} + C$


They have one thing in common. They all are built from smaller terms using $+$. Now, if we want to abstract away from the details and focus on the general common property of these terms, we just turn everything that is not $+$ into variables and end up with $\lambda x.\lambda y.x + y$, a function abstraction (if that is the name your introductory text uses; I am more familiar with the name "lambda abstraction").