It just means that the item in question (generally) requires significantly more mats than a normal item so it's worth 5 points. I would say it's up to you if you want to do those or 1 pointers. I know when leveling tailoring I made 1 pointers over 5 pointers because it gave me more items to disenchant. All depends.
Yes, it increases skill points by 5. Whether you should make it or not is dependent on how expensive is it to level using 1 per skill up. Is it less than 5x expensive than the 5 skill points? Or is the 5 skill point one cheaper than making 5 of the single skill ups.
Your mileage may vary with server and economy, so I doubt you can get a solid answer.