The term permalink is abbreviation of “permanent link”
Let’s see which one is easier to understand,
The last option makes sense, Isn’t it?
Permalink optimization can help your website in many ways. First of all, it is very easier for visitors to read URL and assume what the webpage is all about. Similarly, it helps search engine robots to read it and display it on appropriate search results. This link will be permanent and distinctive for specific page, blog or archive page.
That’s why it is important for SEO, because it can increase keyword ranking for search engines.