Could someone please explain me why do I need to set up users and add it to database? WHat do I get with that action?
Without knowing the context - now answer You get another user that is able (depending on rights) to connect to the database, create new database/tables, delete, modify, read etc..
No one can connect to the database unless it's a user known to the database. The default user is root with no password. If you don't care about security, that's all you need. If the database is used on a public-facing site (IOW, you're not the only one connecting to it) you need secure (name/password pairs) users and you have to delete root as a user.