That sensor is reading the pulses of the magnets on the alternator rotor to determine where the crankshaft is relative to top dead center of the pistons movements.
The computer uses this information to determine the amount of advance that is needed for the ignition timing and when to tell the fuel injection to inject a squirt of fuel into the inlet.
The engines speed and crank position plus, the oil temperature, the atmospheric pressure, O2 sensor reading and throttle position also determine where on the computer map the engine is so it can set the spark advance and fuel injection to the proper settings.
I tend to get carried away sometimes so simply put the Crank Position sensor tells the computer what the engine speed and timing is so it can meter the fuel and trigger the spark for the best running condition at any given time.