Honing is done to smooth the surface the piston rides on. If it is scratched, pitted, rusted, etc., it can cause the piston to not move freely, or fluid to leak from around it.
A caliper rebuild generally means removing the piston, honing the cylinder, and replacing all seals and other "wear" parts. With how cheap remanufactured calipers are these days, rebuilding them yourself is largely a thing of the past: it's easier to just buy a guaranteed-to-work drop-in unit and be done with it.
Just FYI, in drum brakes, there is more to do: besides honing the wheel cylinder, there are lots o' little springs, rods, adjusters, pins, etc. to replace (or send flying across the shop when trying to reinstall them).