Yup! They're mostly a thing to prevent double uploads and to make sure artists get properly credited for their work. They're recommended, not required though.

Yup! So like, the picture I did of you? I sent you a collections request because I drew your character. Accepted collections show up in your collection gallery for people to see.
Alternatively, someone could also post something you made for them in their gallery and send a collection request to you (for instance if they were here on Weasyl before you). Of course, they should give credit as well so others can see, but it saves the trouble of reuploading and having dupes.