Well, having lived in Larimer County, CO, for the four years of vet school (I'm right down the road in Boulder County now!), I can tell you exactly what the little number is for. It is the registration number that identifies the animal. If someone finds the cat, they can call the Humane Society (at the number conveniently stamped on the tag), give them that registration number, and they look up your license in their files to find *your* contact information. I returned a lot of lost dogs that way when I lived up there!
License tags are renewed every year. Current proof of rabies is required. However, if the rabies vaccine given to your cat was a 3-year, then you only have to get the license, not a new vaccine, every year. It's a lot like our car emissions stickers--on a new car, the emissions sticker is good for 2 years, so even though you can skip the test, you still have to pay for registration every year.