Bitcoin nodes each keep a local copy of the full blockchain. There is no central copy for any other node to download. So when new nodes come online they must download the blockchain from other peer connected nodes. And as new blocks are added to the chain, nodes share those validated blocks to other peers to validate and continue building their local copy of the blockchain.

Same as you download new blocks from other nodes, this option would allow other nodes to download from you.

It will eat more bytes of uploaded data. Only enable it if you have really fast and stable connection. As it says, it will work over Tor automatically, but for clearnet (usual internet), you may need to update port forwarding on your router depending on your setup.