You use that 12-24 word seed as a backup. Let's say, if you lose access to your computer, you grab your new computer(or phone), install a reputable(and open source) wallet app, enter in the 12-24 words, then boom shakalaka. You now have access to your funds.
So that assumes that I have my Bitcoins in an online account ?? Does this work if I have my Bitcoins on a USB drive

No worries, I trust you guys, no one here would try to use this for a bad purpose.