There is a large ampitheater where Fantasmic is performed. It holds about 5,000 people but the show is very popular. To get seats, you typically have to line up at least an hour ahead - longer if it's a busier season. Pretty much all seats are good seats.
If you do the dinner package, it means you make a reservation to eat at one of three restaurants in the park earlier in the day. When you finish your meal, you get a special card that allows you entrance through a backstage door 30-45 minutes before the show. You also have seating in a reserved section of the ampitheater. There is no extra cost aside from your regular meal at the restaurant.
So, rather than show up an hour or more before the show, you can show up half an hour early, have a reserved section waiting for you, and make a quick exit as the section is the closest to where you are let out. If you're going to eat a sit-down meal at the park anyway, it makes sense to do the package and save yourself the waiting time.
The only time I wouldn't do the package was if you're going at an extremely busy time of year when they sometime do two Fantasmic shows in one night. If this is the case, the second show will be empty enough to walk in 10 minutes before and still get a seat. But if you're going to the early show, or there's only one show while you're there, do the package or be prepared to camp out early.
