When creating a smart contract on Ethereum Blockchain the contract takes the address of its creator. The use of this contract to you is when you want to add a new ERC20 token to your wallet you'll need to add this contract address for this token for MEW to be able to read your balance of this specific token.

You don't sent funds to the contract address ... when participating in an ICO that is ERC20 based, the creators specify to you which address you're supposed to transfer the funds to, then the smart contract consequently sends you back the corresponding amount of tokens you're entitled wither instantly or after the ICO has ended