These kinds of proofs are called **combinatorial proofs**. In order to choose a mayor and $m$ council-members, we can do it in two ways: we can choose a mayor and then the council-members, or we can choose the council-members and then choose the mayor.
In the first way, we have $n + 1$ choices for the mayor. To choose a council, we need to pick $m$ people from the remaining $n$ townspeople (as the mayor cannot be a councillor). Thus, there are $\binom{n}{m}$ ways to choose the council; multiplying the two together gives $(n + 1)\binom{n}{m}$ ways in total.
Can you see how to get the other formula combinatorially?