Mostly for not loosing unsavable work across transit. Though, Windows has kinda blurred the line between shutdown and standby, so now you can do neither (I guess you can still shutdown properly holding down the shift key while pressing the button, but who thinks about that?).
But standby was indeed much more prevelant when booting your laptop took 2~5min.
Yup, that’s the one.
Had quite some problems with programs not cleaning caches properly and drives having weird behavior when accessed in offline state when they first introduced it, though I imagine it surely must have become more robust by now.