what is "reset app" in creators update

No, you can just erase that data if some some reason that data is hindering normal use.
 
We already have backup/restore option. Go to backup and then advanced options and see list of apps that you can enable/disable. When you restore a backup all the apps will restore their data. When you delete an app and then re-install they will restore the data. If you ever installed an app from the store you will see when following the progress that at one point there is a "restoring data" process after the install.
 

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