To be well-rehearsed means that you have practiced so much that you know everything about what you are performing. It means you have formed good habits, and you don't have to think about what you're playing anymore. When you are well-rehearsed enough that you don't have to think about your part you can start to listen to the rest of the band and hear how each part fits together. Being able to play and listen to the rest of the band can help show you your proper purpose in the song.
If the whole band is well-rehearsed, then the performance comes off sounding professional and groovy - if the band doesn't have to worry about their own parts, they can just groove! And then the audience will feed off that energy and it will exponentially grow into a fantastic performance.
That's my theory anyway...