Anyone have experience with fiberglass?

What exactly does the vacuum bag do?

Just sucks all the air out and puts 1 atm evenly over the whole peice, thus requiring less adhesive (epoxy/resin) to bond the layers?

correct. Greatly reduces the epoxy weight and it forces the weave tighter together making it much stronger. Also, with semi-complex parts, it helps actually force form the composite to the shape of your mold.