What does a red notification flag on System Preferences icon mean?

A red post-it-like notification flag recently appeared on the System Preferences icon in my Dock and I could no longer open Sys Prefs by clicking on the icon--all I got was the Notifications window. I signed out of iCloud and the problem (and the notification flag) went away, and now I can use SysPrefs again.

I have no idea what the notification was for, or whether by signing out of iCloud I missed something important. (For instance, a notification that says, "Alert! Your computer is on fire!") I think I also turned off "Find my Mac" when I logged out of iCloud.

Could someone enlighten me about all this, i.e., (1) Why the notification flag appeared; (2) Why I couldn't open SysPrefs from the Dock; (3) Where I find notifications I've inadvertently wiped by signing out of iCloud?

Thanks very much for any enlightenment you can provide. 🙂