It allows access to AUTOEXEC.BAT as well. The configuration file controls various settings of DOSBox: the amount of emulated memory, the emulated soundcards and many more things.
'localfile' is located on the local drive, not a mounted drive in DOSBox. writeconf localfile Write the current configuration settings to file.
It can save the current settings and language strings to disk. CONFIG can be used to change or query various settings of DOSBox during runtime.