It does a couple things. It’s one service that routes requests to multiple services. So if you have radarr, sonarr, etc., you can put a reverse proxy in front and use the same ip-port to connect to all, and the proxy routes the request to the service by hostname.

If you have multiple instances of the same service for HA, it can load balance between them (though this is unlikely for a homelab).

Personally I run all my services through docker and put traefik in front, so that I don’t have to keep track of ports. It’s all by name.

It’s also nice because traefik handles HTTPS termination, so it automatically gets certs for each name, and the backing service never needs to worry about it (it’s http on the backend, but all that traffic is internal).