Strength of Schedule (SOS) measures how difficult a team's set of opponents is, or was, based on the overall quality of those opponents. It puts a team's record in context: beating good teams consistently means more than beating bad ones.
Two teams can post the exact same win-loss record while facing very different levels of competition to get there. SOS is what separates those two stories.
Illustrative example, not live data: same 25-15 record, very different paths to get there. Team A's record is the more impressive one.
SOS gets used two ways: looking backward, it explains how impressive (or hollow) a team's current record actually is. Looking forward, remaining SOS is a real factor in playoff races and tanking races alike, a soft closing schedule can be worth real ground in the standings on its own.
Not really. Different sites compute it slightly differently, some use opponents' win percentage, others use opponents' point differential or Net Rating, but the underlying idea is always the same: how good are the teams you've had to play, on average.
Two teams can be tied in the standings while one of them earned it against much tougher competition. Remaining Strength of Schedule also matters looking forward, a team fighting for playoff seeding with a soft closing schedule has an easier path than one facing a gauntlet of good teams.
Not necessarily worse, but it does mean the record understates how the team has actually performed relative to a neutral schedule. A team with a losing record against a brutal schedule can be a stronger team than its win-loss column alone suggests.