What about places? My two year old has a hard time with transitions and he has seen the park or jumping gym many times with me constantly telling him what it is. When I tell him we are going to the jumping gym and i get all excited he doesnt seem to have a clue. Not like he doesnt want to go but really it goes over his head, we get in the carseat and he screams on the way there and I keep explaining we are going to have fun (by naming his favorite things to do there) . He does not calm down till we actually get inside the building and he sees the matts and the balance beams. Its like a lightswitch goes on. I have taught two year olds for ten years and I know when we say outside or water play (no matter how often or not we us the terms) they know to expect it and they line up or get excited and go to the door. My son seems to never get excited about the ideas of the places he loves to go. Would saying a name of a place be considered abstract? If he can not see it physically he does not connect it.Let me premise by saying I'm not a trained child psychologist. I'm a teacher. And it's really hard for me to evaluate specific cases without knowing the child. So if I'm off basis that's the reason. If it's a big concern, I would speak to your child's doctor.
That being said there could be any number of reasons.
1) Not all children develop at the same pace. So the fact that he's two and still having trouble understanding what you are saying is not a total surprise. His ability to connect language with memory of a place is still developing. I would get worried if he was three. And I would still keep talking to him about where you are going. With some children it takes a lot of repetition before they finally begin to associate the words with the action. It may help if you use baby signs so they he has a visual cue as well. I used to use the sign for library with my oldest. And it may help if you establish a consistent time and day of the week in which you go (if you don't already) so that he's already mentally prepared. You could also try pictures.
2) Some children don't transition well. But we also forget that in going to a new destination numerous transitions are taking place. You may say "well, we're going to the gym" but he's thinking "she's putting on my shoes and I don't want my shoes on" and then "she's putting me in the car and I don't want to be in my carseat." So it may have nothing to do with whether or not he's going to the gym but more to do with all the annoying transitions that come before hand.
3) He could have a learning issue. It's still a little early to determine that and since I can't see your child it would be hard for me to completely say he's perfectly normal. You know your child best. But some children do have some learning issues that parents notice when they are that young. A lot of people automatically think about autism and autism spectrum disorders but there are numerous audio and visual disorders that affect children too. If it's a concern of yours, you may want to talk to your pediatrician about what you told me. They may be able to do a preliminary evaluation to make sure that he is able to hear you well. Some auditory processing disorders have nothing to do with whether or not your child can hear but rather what they can understand. Does your child understand other things? Is he talking? Those may be determining factors. Try giving him simple directions without a visual cue (like pointing) and see if he's able to follow them. You may have to ask him repeatedly and I would pick something he likes for example getting one of his toys. That's because of the age thing.
If it's any consolation my three year old only recently calmed down (he was about 2.5 years) about getting in his carseat and going some place. It wasn't that he didn't know what I was talking about. It was that he didn't like being strapped down. Now I can kinda negotiate with him. I explain that we can't go to his favorite places until he is in his seat. And I allow him to explore the car a bit for a couple of minutes before hand. I consistently warn him with his time is up and then, even if it's a fight, in the seat he goes. Once we get there it does become easier. I know that he knows where he's going because he repeats it back to me and talks about it.