Merkle trees/hash trees are important for two reasons:
Systems can use them to hierarchically verify data with cryptographic security guarantees. Practical applications include Git and other DVCSes as well as e.g. Tahoe-LAFS and Bittorrent, but there's less nice applications too (as always) such as one of the DRM systems (is it AACS?) that uses it as a key revocation mechanism.
Merkle trees turn directly into a signature scheme.
... that section had me totally flabbergasted. What's it about? There is no connection whatsoever to cryptography, as far as the text is concerned.