It's a key part of a number of little plot threads. It forces Sheridan and the others to start to move more quickly now that the Shadows are out in the open, and even Earth has to move to investigate and deal with this new threat, resulting in, at least, Endawe showing up on the station to get information that Earth can hopefully ignore. Arguably, it also lets the Shadows move more openly, which builds to Season 4.
I still always like Season 1 better, but a lot of that is because I strongly dislike Sheridan. I kinda end up on Garibaldi's side when he splits from the group in Season 4.Overall thoughts on season 2: Despite its fair share of filler episodes, and an arc following Talia Winters which goes precisely nowhere due to the actress not returning in season 3, this is where the real meat of the show begins. For most of season 1 you could easily believe B5 was a Star Trek style "monster of the week" show, but season 2 is where the arc begins in earnest. I do wonder how many people didn't make it past the first season because they didn't realise how good it was going to get?