Wine is a complex substance. Open a bottle of it now, and it may taste fine. Open a bottle of the same wine several years from now, and the wine becomes something else entirely. Rough edges in the flavor will have smoothed out and the overall flavor of the wine will be more balanced and mellow.
Why age wine? Well, as stated above, the many components of the wine will mellow out over time, and bring a harmonious balance to the flavor of the wine. The tannins, present in red wine, bring a bitter and astringent flavor. Given time, the tannins help to age the wine. As wine ages, the tannins precipitate out of the wine, leaving a smoother and more mellow flavor. As the wine ages, the acids will lose a bit of their bite, allowing the fruit to come out more. As the components of the wine age, they also bring more complexity to the flavor. What you end up with after several years of proper aging is a complex and balanced wine.
What wines should be aged? There are certain guidelines as to what wines should and should not be aged, but they are simply guidelines, not hard and fast rules. Most wines from California are meant to be consumed immediately, and should not be aged....