The app file picker dialog is part of the app files manager, and, can be used to add to the app scripts and stylesheets files, to be available for the app. We can specify here file paths (files that are then copied to be available for the app) and also file URLs. Sometimes we need to specify some arguments when require these files and this dialog allows to specify such optional arguments too.
The "Is content" and "Is background" checkboxes are intended to be used only by apps which are then compiled as Web Extensions. You can check the "Is content" and / or the "Is background" checkboxes in order to include the JavaScript file in the Web Extension manifest, inside the "content scripts" and / or the "background" scripts. Just leave the checkboxes unchecked in order to include the JavaScript file to be available for the app.