Understanding the nature of your audience will help focus your design in a number of ways. You may be able to better understand how to structure the links on your website. You may be able to provide different amounts of certain types of online content. The point is that you can create a more effective site once you know who you're trying to talk to. If you want to have a conversation with someone, it helps to know what language they speak before you start.
People tend to be confused by clutter.
Some web designers will argue differently. Organizational patterns in websites can be easily integrated into a website along with whatever aesthetic choices you've made. If you spent some time writing websites manually or even a few minutes playing around with FrontPage, you've probably noticed how many options you have. A beginner's first inclination can be to insert as many hover buttons and scrolling marquees and flashing lights as possible. A good rule of thumb is to step back and ask yourself if this addition really adds to the value of your website.