You need a compulsory reservation only on some trains. 

Like Germany, Austria, Switzerland or Czech Republic you are allowed to hop on the train with your Eurail Pass without reservation, even on high speed trains like ICE, TGV or Railjet. Nighttrains like Nightjet or Euronight need a reservation (example: on Nightjet a seat cost you 14€). In Switzerland you need a reservation on Bernina Express or Glacier Express → You can avoid this using regional trains. In Czech Republic you need a reservation for the Super City.  

Like in the Netherlands, Belgium or Sweden you need a reservation only on high speed trains like TGV, Thalys, Eurostar or X2000 (on ICE high speed trains no compulsory reservation) and on night trains. In NL and BE you can avoid the Thalys using IC instead. 

In France, Spain or Italy you need on every long distance train like highspeed trains (TGV, AVE, Frecciarossa) but also on Intercity trains you need a reservation.

The costs for a reservation are between 3€ on Italian IC to 10€ for Italian high speed Frecciarossa and French TGV (booking in advance) to 30-35€ for a international TGV, Thalys or Eurostar between France and other countries. If you plan in advance you can often avoid trains that need a reservation. But like in France, the TGV is very fast that it’s faster by train than by plane. The Eurostar between London and Paris needs only 2 hours from city center to city center. You can also use night trains so you don’t need a hotel/hostel. 

In eastern Europe you can also buy normal train tickets, because there are often the train tickets very cheap, and so you don’t need to use the Eurail Pass. 

How can you book reservations? On eurail.com reservation service (but with a fee) or direct with the national carrier website (not possible for italy, france or spain) → there you need to go to a ticket office or use eurail.com.

Please note, that for TGV/AVE between France and Barcelona (Spain) you can get only a reservation on paper that you get by mail or at ticket desks. 

@Milam Black 

The answer of @Angelo  have all the informations you need. I couldn´t explain it better.

I’d really like to travel by train instead of flying on our family vacations. 
So I was happy to see that children until the age of 11 get a free ticket. We’d like to travel from Dusseldorf-Germany to Malaga-Spain. The ticket itself would cost around 670€ for the four of us for both routes. 
But now I realised that the reservation of seats would cost additional 99€ per person per route.
So we would have to pay 800€ just for the reservation  . Together with the 670 for the ticket, that is just ridiculously pricy. The ticket is good, but the reservation costs are just way too high. I really hope Interrail will find a better solution in the future, especially for families with their children.

For just one return trip, Interrail is not always good value, especially if you can book a long time in advance.

The railways companies themselves can decide what reservations or supplements they charge (if any). French and Spanish railways, unfortunately, have quite expensive supplements, especially for international high-speed trains. There are ways to save money though.

@Arne 
Spain and France are not really Railpass friendly You may use cheaper routes (less reservation fee´s) for example Düsseldorf - Karlsruhe/Offenburg then with regionaltrain to Strasbourg  or Freiburg and then to Muhlhouse and catch from there domestic TGV 10€ per seat to South France and then from there on the next day via Perpignan,Portbou/Cerbere to Barcelona and finally a domestic spanish train to Malaga