Tyler, the jewels are used as bearings in the movement in order to provide less friction. They are synthetic rubies and the contact surfaces can be polished to a very high level of finish. They also are very wear resistant, so are one of the ideal substances for this kind of application.
Oh yes, regarding the number of jewels, this can be due to the quality of the movement (where the movement uses a jewel for a bearing instead of some other material) or it can be due to the complications on the watch (with more functions meaning more bearing points and therefore, more jewels). Hope this helps.