The effects loop, in short, allows your preamp single to go INTO your effects before hitting the power amp. 

This is beneficial because time based effects going into distortion sounds can be pretty bad sounding. Especially something like a really warm or tapey delay. Something with a lot of degradation gets super muddy when the delays are hitting the dirty signal. 

However the dirty signal hitting the delay and then the delay repeats the dirty signal sounds much nicer. This is also true for reverb. I prefer the effects loop for all two channel amps when I want my time based effects to sound good with dirty channels. 

The reason some people have pedals up front and in the loop is because some pedals are better for hitting the preamp. Dirt pedals are good for this because boosts, overdrives, and at time fuzz pedals can push the preamp of an amp into a really gnarly growl that people find really nice. Running dirt through the FX loop can cause issues if the output is cranked on a dirt pedal. I know the output can mess with the power amp a lot. Also, it really doesn't sound that good when a tube preamp goes into a dirt pedal, in my opinion.