baden
to swim
To swim in water for pleasure, usually in a lake, the sea, or a swimming pool.
An heißen Sommertagen gehen wir gerne im See baden.
On hot summer days, we like to go swimming in the lake.

to bathe / swim
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to swim
To swim in water for pleasure, usually in a lake, the sea, or a swimming pool.
An heißen Sommertagen gehen wir gerne im See baden.
On hot summer days, we like to go swimming in the lake.

The verb 'baden' (to bathe/swim) is the origin of many nouns related to water and washing. Examples are 'das Bad' (bathroom), 'die Badewanne' (bathtub), or 'der Badeanzug' (swimsuit).
Nach dem Baden brauchst du ein frisches Handtuch.
After bathing, you need a fresh towel.
You can tell whether 'baden' (to bathe/swim) means swimming outdoors or washing in the bathtub from the place. Phrases like 'im See' (in the lake) or 'im Meer' (in the sea) point to swimming, while 'in der Badewanne' (in the bathtub) means washing.
Die Kinder lieben es, im Meer zu baden.
The children love swimming in the sea.
To express that you are moving to a place in order to swim there, the construction 'baden gehen' (to go swimming) is often used. In the perfect tense it is 'sind baden gegangen' (went swimming).
Am Wochenende sind wir mit Freunden am See baden gegangen.
At the weekend, we went swimming at the lake with friends.
In the idiom 'etwas ausbaden müssen' (to have to pay for something), 'ausbaden' is a separable verb. The prefix 'aus-' stands at the end in a main clause. The expression means having to bear the negative consequences of something.
Er hat den Fehler gemacht, aber seine Kollegin musste ihn ausbaden.
He made the mistake, but his colleague had to pay for it.
The construction 'in etwas baden' (to bask in something) is often used figuratively. It means to enjoy something in abundance, for example 'in der Sonne baden' (to bask in the sun), 'im Applaus baden' (to bask in applause), or 'im Geld baden' (to be rolling in money).
Nach dem Sieg konnte die Mannschaft im Jubel der Fans baden.
After the victory, the team could bask in the fans' cheers.
to swim
'baden' and 'schwimmen' both have to do with water. 'schwimmen' means that you move through water using your arms and legs. 'baden' can mean that you are in the water for pleasure, for example in a lake or swimming pool. But it can also mean that you wash yourself in a bathtub. Learners often confuse the words because when you 'baden', you sometimes also swim. If the movement in the water is important, you say 'schwimmen'. If being in the water or washing in the bathtub is important, 'baden' fits better.

Am Abend badet Lisa, weil sie sich nach dem langen Tag entspannen möchte.
In the evening, Lisa takes a bath because she wants to relax after the long day.
Im Sommer schwimmt Max jeden Morgen zehn Bahnen im Freibad.
In summer, Max swims ten laps every morning at the outdoor pool.