You can't get anywhere without it, and yes, it's very boring if you're not a total-sandbox-fan playing multiplayer. And the game does utterly squat to inform you that it exists. It took me an hour of poking around before I found that page, and then it all clicked.
So maybe I should warn you: it gets way more interesting when you start crafting. You start planning. Exploring. Fighting back against the zombies. Some caves are massive - light them up and find veins. Earning the ability to build your floating fortress is strangely rewarding.
It's also an oddly beautiful game in its simplicity - your lit caves are visible from a long way off with a soft glow, and you'll quickly find that light means safety... until the spider-riding skeletons start chasing you when you venture too far. And it's kind of creepy how quickly you start to feel ownership over what you've made.