It goes over the S curve in the USB cable and serves to retain the cable around the three strain relief posts.
And between the LED leads and the white plastic there should be an even tinier conductive pad, which serves to improve electrical contact between the LED and the membrane. The pad sits in a small recess in the white plastic and the LED leads fit into two grooves on the membrane side of the pad. This part is easy to lose during disassembly, so be mindful of it!
Compare the short screws carefully before reinstalling them. The shouldered screws go in the holes on the front edge.
I found it more convenient to lay the computer keyboard-down on a table with the display hanging over the edge while performing steps 11–15.
On my MacBook, the screw nearest the optical drive is 5mm long.
When replacing the logic board, route the DC-In cable around the front side of the aluminum post.