Backlinks are especially valuable for SEO because they represent a "vote of confidence" from one site to another. In essence, backlinks to your website are a signal to search engines that others vouch for your content. If many sites link to the same webpage or website, search engines can infer that content is worth linking to, and therefore also worth surfacing on a SERP. So, earning these backlinks can have a positive effect on a site's ranking position or search visibility.
Search Engine Optimisation is the process of optimising your online content so that a search engine likes to show it as a top result for searches of a certain keyword. SEO is the art and science of getting pages to rank higher in search engines such as Google. Because search is one of the main ways in which people discover content online, ranking higher in search engines can lead to an increase in traffic to a website.