What purpose does simple syrup serve? I read that you put it on prior to frosting and/or applying fondant.

It makes a moister cake. Most mix cakes won't need this unless they have been over baked, but some scratch cakes can be a little dry and this will take that away. Of coarse it tastes good and adds flavor to any cake. HTH

I like using SS if I am making a filling with a liquer in it. I will add a little to the ss to enhance the flavor a bit or I have added coffee to it to enhance a chocolate mocha cake.

Cake mixes have preservatives in them so you can make them days ahead and not have the cake dry out. ( It gives you extra time for decorating)

Scratch cakes don't have the chemicals in them, and so can become dry over the 2-3 day process of decorating an elaborate cake. The simple syrup seals the cake and helps to retain moisture. It is also an opportunity to add a layer of flavor to the cake.