what is coreaudiod

Used to play audio through the core audio device. The "d" on the end means it is a daemon. Since you don't provide any data as to its CPU time simply being number one is meaningless. How high is the number? Does it stay high all the time? What are you doing that requires the daemon? What happens if you force quit the process?

Oh, yes, you do need it.

That number just reflects the amount of time it has been in use. The number of importance is the column labeled %CPU that tells you how much the CPU is taxed to run that process. On my machine the number you were looking at is 6:35:20, but the %CPU is 0.7%. It's this number that indicates whether that process has crashed. I don't think you have anything to worry about, but check the %CPU number to be sure.