1st I figured they are related to map markers. Then I realized I can just drop one in exterior space and type in what will it mark and what type of location it is. So I guess it's not (although one Location option does seem to let me link it to the map marker). I saw that every used interior cell has a Location, and in Object Window, under Locations I saw that some locations have parent location. So, to be honest, I have no clue what are they for. I checked Creation Kit wiki, but, as usual, it just lists Location window options with horribly vague description without saying what which option actually does, and without saying what Locations generally are for at all. So I'd really appreciate it if someone could enlight me.

I think they are mainly to be used with Location aliases. There's an example in the http://www.creationkit.com/Bethesda_Tutorial_Radiant_Quests that shows how you can set up quests that can be set in random locations.

Aah I see. So if I don't have anything radiant in my cells or if my quest affects only my specific objects I don't need it?

Need, no, I don't think so.

I find it quite handy sometimes, though, for setting up quest aliases, to be able to pick things directly from the location alias ref type dropdown.

And another benefit is in navigating about the world in the CK. I open up my location from the object window, double click on e.g. a locreftype or actor listed there, and it's selected in the render window.

Aah that's nifty thing to know. So far I don't need it to be detailed since this is my 1st dungeon, I don't think I'll be doing quests for awhile. Thanks for the info!

Oh, I've remembered another use too: setting up http://www.creationkit.com/Encounter_Zone.

Sweet, thanks. I might be using this stuff soon afterall, I checked out how they did it in a 2nd copy of cs, it was simple enough so I made a custom location anyway. Thanks man.

The other thing they're useful for is assigning keywords, and then having or allowing actors to take different actions based on those keywords. Locations and keywords are how some followers know to say different things based on whether you're in a Dwemmer ruin or a bandit hideout; a camping mod might only let the player make camp if they're not in a LocTypeHabitation; etc. So there's a sense in which using locations--where appropriate--may not be necessary for your own logic, but is still the best practice to make your mod compatible with the logic that other mods may want to implement.

The way I set it up is- I created a custom location and asigned the exterior cell that holds the entrance to my tomb to that location (along with all the interior cells). And that location has one of the vanilla holds as parent location (used the same parent location that Korvanjund has since my tomb is only a few cells away from that one). I figured this is the right way to do it?