Plebian has given the exact answers I would about what the terms mean. They are useful in comparing external and teminal ballistics of rounds.
For some examples...
Lets say you wanna compare, fairly, the relative energies of 9mm, 40 S&W, 10mm and 45 ACP rounds. Well, for the 40 and 10mm, being the same diameter, you would use the same weight, but what of the 9mm and 45 ACP. Using the same weight will penalize the smaller diameter rounds with bullets that are heavy for caliber. Can you imagine a 185 grain or 230 grain 9mm? And try to find load data for a 147 grain 45 ACP....
Sectional density to the rescue! A 230 grain 45 ACP is .161, a 180 grain 400 is .161 and a 147 grain 9mm is .167. This puts them all on equal footing in regards to how much velocity/energy they are gonna need to do a job, assuming similar bullet construction. And there are plenty of bullet families that support these weights in these calibers. Same rules would apply to rifle calibers.
It is currently very in vogue to favor rifle rounds designed around long skinny bullets that have high BC and SD. This is because of the increase in popularity of long range tactical rifle shooting. I am certainly not immune as my most recent AR-15 build was a 6.5 Grendel, and I have a AR-10 build in progress in 260 Remington.
