What is a Thunderbolt cable? What's its purpose. I see that it charges my MacBook faster but is it necessary?

Actually the cable you are using for charging the laptop which shipped with the laptop from the factory is not a Thunderbolt cable, but a USB-C charging cable which only supports the USB2 protocol. A Thunderbolt cable usually has a lightning bolt icon on the connector which indicates it supports the Thunderbolt protocol (and the USB3 protocol as well). I know this can be confusing. Here are a few articles which may help:

https://eshop.macsales.com/blog/55946-whats-the-difference-between-thunderbolt-3-and-usb-c-and-which-should-you-use/

https://eshop.macsales.com/blog/70954-is-a-cable-usb-c-or-thunderbolt/

Here is an Apple article, but it is not well written and may actually be confusing, but it does mention that the charging cable which shipped with the laptop only supports the USB2 protocol and mentions the speed:

About the Apple Thunderbolt 3 (USB-C) Cable - Apple Support

It's a cable designed to be used in a Thunderbolt port. They can be used generally for any device you need to attach to your Mac as long as you have compatible ports.

About the Thunderbolt ports on Mac – Apple Support (AU)