I don't have Cat for the Working Mat with me, but wiki has a good explanation about the definition of universal arrows.
As per why they are useful, they are useful because they allow us to discuss universal characterizations. These are arrow theoretic characterizations of objects in a category that specify them up to unique isomorphism. This idea is perhaps one of the most powerful notions in the entirety of category theory. We live in a very categorical, arrow-obsessed world. Most of the modern definitions of things involve and become simpler when we are able to phrase them entirely in terms of category theory. In fact, most proofs become trivial when viewed in this purely arrow-theoretically defined way.
Let me illustrate:
Suppose that you have an abelian group $A$, a collection of abelian groups $B_n$, and $\displaystyle B=\prod_n B_n$. It is a theorem, probably known to you, that as groups
$$\text{Hom}\left(A,B\right)=\prod_n\text{Hom}(A,B_n)$$
Now, if you defined $\displaystyle \prod_n B_n$ to be "the set of all tuples..." then this is non-obvious. But, one could have used the following universal characterization of a product:
Let $X_n$ be a sequence of abelian groups. A product of the $X_n$ is a group $X$ and a set of group maps $p_n:X\to X_n$ such that given any abelian group $A$ and a set of group maps $f_n:A\to X_n$ there exists a unique group map $f:A\to X$ such that $p_n\circ f=f_n$
You can quickly check that our usual definition of $X=\displaystyle \prod_n X_n$ along with the canonical projection maps $\text{proj}_n:X\to X_n$ satisfy these definitions. Then, this theorem really just becomes a tautological restatement of the definition of a product!
Yes, you may argue that I have pulled the old French trick of turning a theorem into a definition, but let me give you another example.
I assume you are aware of the tensor product $M\otimes_R N$ of two $R$-modules ($R$ is commutative and unital for convenience sake). I doubt that you could find any modern user of mathematics that would tell you that the tensor product is not an indispensable tool.
So, what is the tensor product? Well, as should be obvious, one merely takes the free $R$-module on $M\times N$ and quotients out by the submodule generated by the relations $a(m,n)-(am,n)$, $a(m,n)-(m,an)$, $(m+n,l)-(m,l)-(n,l)$....
I doubt that any algebraist worth their salt thinks about tensor products this way--it's just a garbled mess. The way that one should think about tensor products is by the following universal characterization:
Let $M$ and $N$ be $R$-modules. Then, an $R$-module $T$ along with an $R$-bilinear map $b:M\times N\to T$ is a tensor product of $M$ and $N$ if for any $R$-module $L$, and any $R$-bilinear map $f:M\times N \to L$ there exists a unique $R$-module map $g:T\to L$ such that $f=g\circ b$.
This horribly mentioned construction then becomes necessary to mention, only once!, so that we know tensor products always exist. You see, the operative part about a tensor product's definition is that they allow you to trade in bilinear maps for linear maps--they turn multilinear algebra into linear algebra.
So, in the extremely important example of tensor products, one sees that universal constructions aren't just a convenient rephrasing of a definition but the only sensible one