For both men and women, sexual (mental) stimulation has the effect of releasing a whole set of chemicals (physical) that direct blood flow in the genitals.
In men (but also in women/surrounds the clitoris), this blood flow is directed to the cavernous body, inside the penis. It is this blood flow that enters and is retained in the cavernous body that creates the erection. Sexual stimulation causes the release of nitric oxide (NO)/nitrate,which is one of the main mediators causing an erection.
In women, the clitoris has a vascularization that makes it erectile. It is also the most sensitive organ that can be found in women. When stimulated (mental aspect), it triggers an opening and lubrication of the vagina and congestion of the organs (physical aspect) when the body prepares for sexual intercourse.