Seek Time (more specifically Access Time) is the time it takes your hard drive read/write heads to locate a file, move into position and read the file is the slowest aspect of your hard drive. While it does happen incredibly fast in time frames you are accustomed, 10 to 20 milliseconds can be a long time in computer time quanta.
The more scattered your files are around your hard drive, the longer these seek times take. If a hard drive read/write head has to move all over your drive to locate and read a series of files e.g. at boot up when thousands of files are read, thousands of files X 10 to 20 millisecond reads = a long time.
This is the same phenomenon when reading a fragmented file. Your hard drive heads need to move all abound the disk to locate and read all the pieces of the file.
To optimize performance, one should aim to keep all frequently read files close together so that the hard drive heads do not need to move long distances between files to read files. This is known as seek confinement. You might have heard of short-stroking your drive. This is the same effect.
A well executed file placement routine will place all frequently accessed files within 1 to 2 millisecond distances instead of 10 to 20 millisecond distances.
You will improve access times by a factor of 3 (since access times include a concept known as latency - the average time it takes a drive platter to rotate 1/2 turn - generally around 4.9 mS. ) and seek times by a factor of 10. By maximizing seek confinement, i.e. how close together your data is, we've given ourselves 300% better average file access performance.
Next.... piecing it all together for the compound effect.