In many applications the objects are iso-oriented, which means that their sides are parallel to the axes of the coordinate system. These objects not only have a compact description, but there are many algorithms which are faster for iso-oriented objects.
Bounding boxes are used to approximate objects and the only operations you can perform on them is to get their bounds and to check if two bounding boxes overlap. They are axis-parallel and the difference to the class CGAL_Iso_rectangle_2<R> is that they are not templated. A typical situation where to use them is to check if two complicated polygons intersect. You can first check if their respective bounding boxes intersect. If the answer is negative, you are done, otherwise you really have to check if the polygons intersect.