Its purpose is to protect your data sets from unauthorized access. READ permits a data set to be opened for input. EXEC permits a data set to be accessed to load a program into memory to be executed. As you can see, there is no simple equivalent function for each access type.
Some commands require that more than one type of access be permitted.
Although related, they serve very different functions. DD refers to the department. IIII refers to the individual account holder. However, the LID may not necessarily be the ID to whom the rules refer. In any case, the LID is required for any MVS session.