Graphene, an atomic thin sheet of monolayer carbon atoms, is deemed to replace silicon and revolutionize the electronics industry. It has massless Dirac fermions and exhibits ballistic charge transport, a prerequisite for upcoming futuristic nanodevices, such as field-effect transistors, sensors, etc. However, it lacks an intrinsic electronic bandgap and thus is obsolete for use in these applications. In this work, a first principles study is used to predict the opening of a bandgap in graphene by an engineered introduction of modulations in its lattice. Moreover, it is found that the atomic modulation and the addition of hydrogen atoms at sub-lattices induce magnetism in the graphene sheets. The hydrogen-induced itinerant magnetism (ferromagnetic or antiferromagnetic) depends on the type of defects and the structure of the sheet. This hydrogen-induced spin promotes the role of graphene as a potential material for magnetic memory device applications. Furthermore, with the creation of atomic vacancies and quasilocalized states, it is deemed to allow selective permeation (water/gas) and thus paves the way for its use in-filtration (membrane technology) and hydrogen storage applications.