It doesn't do anything. It just provides the Gemstone Dragons a habitat to live in. The Gemstone Dragons are dragons that give gems instead of coins.
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The only ways to get gems on DragonVale are to win them in the Colusseum or the Dragon Track, complete certain goals, collect them from gemstone dragons, receive them from your Game Center friends, and buy them.
You buy it. It costs about 3,000,000
MT.Ember on the left you will see team rocket, just beat them both up and explore the cave, eventually ull find the ruby gemstone
There is no dragonvale for PC
After you reach level 10, the second island will become available in the market. It costs 75,000 coins. You simply purchase it, and then wait a set amount of time for construction.