This just means a set of subsystems to start up. These scripts are really just links to scripts in another directory usually called init.d . It might find S10syslog first. The numbers tell the run-level script which order to run them in. To change what subsystems start up by default, you must set up these links in the rcN.d directory, where N is the default runlevel set in your inittab .
Most distributions come with six virtual terminals.
You may want less than this to save memory, or more so you can leave lots of things running and quickly flick to them as you need them. You may also want to run a getty for a text terminal or a dial in modem. In this case you will need to edit the inittab file. Somewhere in one of the scripts invoked by init, the mount -a command will be issued. This means mount all the file systems that are supposed to be mounted.