This Heading 1 style has several types of unique formatting, including font size, font color, spacing between letters, spacing above and below, rules for text that follows it, and an underline. As a style, it applies all these formats, and more, at once.
You might be used to applying all your formatting directly from toolbars and menus. For example, to format a heading, you could use the Bold button and the Font and Font Size boxes on the Formatting toolbar. Or the Font and Paragraph dialog boxes from the Format menu, which have more options to help you design text and set alignment and spacing.
You could do it all this way. But it's a lot of keystrokes; and what about when you want to use the same formats for another heading?
This is where styles come in. They're specially crafted packages of formatting that apply many attributes at once. Instead of applying each thing individually, you apply the style once and you're done. The style's there for you to use again and again.