As you have written it, that kernel is completely serial. Every thread launched to execute it is going to performing the same work.
The main idea behind CUDA (and OpenCL and other similar "single program, multiple data" type programming models) is that you take a "data parallel" operation - so one where the same, largely independent, operation must be performed many times - and write a kernel which performs that operation. A large number of (semi)autonomous threads are then launched to perform that operation across the input data set.
In your array addition example, the data parallel operation is
C[k] = A[k] + B[k];
for all k between 0 and 128 * 1024. Each addition operation is completely independent and has no ordering requirements, and therefore can be performed by a different thread. To express this in CUDA, one might write the kernel like this:
__global__ void mAdd(float* A, float* B, float* C, int n)
{
int k = threadIdx.x + blockIdx.x * blockDim.x;
if (k < n)
C[k] = A[k] + B[k];
}
[disclaimer: code written in browser, not tested, use at own risk]
Here, the inner and outer loop from the serial code are replaced by one CUDA thread per operation, and I have added a limit check in the code so that in cases where more threads are launched than required operations, no buffer overflow can occur. If the kernel is then launched like this:
const int n = 128 * 1024;
int blocksize = 512; // value usually chosen by tuning and hardware constraints
int nblocks = n / blocksize; // value determine by block size and total work
madd<<<nblocks,blocksize>>>mAdd(A,B,C,n);
Then 256 blocks, each containing 512 threads will be launched onto the GPU hardware to perform the array addition operation in parallel. Note that if the input data size was not expressible as a nice round multiple of the block size, the number of blocks would need to be rounded up to cover the full input data set.
All of the above is a hugely simplified overview of the CUDA paradigm for a very trivial operation, but perhaps it gives enough insight for you to continue yourself. CUDA is rather mature these days and there is a lot of good, free educational material floating around the web you can probably use to further illuminate many of the aspects of the programming model I have glossed over in this answer.