For the land and sea package...you place the luggage tag on any bags that you check-in with the airline.
You will met the
DCL rep in the lobby of the airport and you will be escorted to the shuttle buses. Behind the scenes, your luggage will be retrieved by DCL and transported to the resort.
I believe you can tag your carry-on items and give those to the Disney rep as well.
Then it is off to the resort ... off to the Parks ... and your luggage will magically be delievered to your resort room.
Then by 8 AM on cruise day, your luggage will be picked up by the bell hops - YOU USE THE SAME TAGS - and the next time you see those bags will be in your stateroom on the cruise, usually by 5:00 or 6:00 PM, often earlier.
After they arrive in your stateroom, you discard the tags. You'll be given new tags for the end of the cruise processing of the luggage (keeping the old tags on may mean that they simply get placed back on the ship for the next cruise, but not sure if that would ever happen).
Hope this helps.