Its not a silly question. Basically skinning is one of the resource skills. Resources can be used to create enchanting stones (those can be applied on your armor and weapons) to change your stats (+dex, -str, etc etc .. lots of combo's possible). Or they can be used for crafting armor.
The tradeskill/crafting system is quite complicated and might be overwhelming at first, be its a good way to earn a penny. Basically there are the resources (hunting, fishing, etc etc) and they sell there stuff through the auctionhouse to the crafters.
There are a bunch of good faq's outhere, but the best one for me is
this one.