Can you explain Assets to me?

Assets are meant to represent things that you produce outside of shots (say, in pre-production) or that are used across several shots. These can be things like 3D models, HDRIs, matte paintings, miniature sets or models, props, characters, etc.

You can link assets to shots via elements. If you do this, then on the assets page you will see a list of all the shots where the asset is used.

A way to contrast assets from elements is that elements represent things that can be composited. You can composite the render passes of a 3D model. But the 3D model itself can't be composited directly -- you have to render out a scene. So, If it is something that is done in pre-pro (outside of a shot, like a miniature model) or is shared across multiple shots, make it an asset. If it is something that gets composited, then make it an element.

Assets are separate from everything else (sequences, shots, elements) so that you can assign tasks and have discussions about the creation of these very important things for the production like models and matte paintings.