Using the Blur Tool
Select Image and Blur Tool
Click and drag over the area you want to blur
Click and drag over the area you want to blur. You can resize your blur box to cover the exact area you want to hide.
Adjust Blur Amount
Double click on the blur in your image to open the Blur Annotation Inspector. Here you can adjust the slider to change the amount of blur that is applied.
Removing a Blur Annotation
To remove a blur annotation simple select the blurred area on your image (you will see boxes around the blur rectangle) and press delete.