Why combining C, SDL and scripting languages?

What are the reasons to use a scripting language like LUA or other,
together with SDL and C code? So, for what role does people use a
scripting language like this?

Is it just to separate code, so that not every one has the full
source, or is it to save compile time, or is it to speed up
development, or are there lots of more or other reasons?

What parts of the code is best suited for being scripted?

And can you use Code to write scripts? so you can move code from one
part to another? And do any one know if there is a C compiler that
makes bytecode for a small VM?

// Daniel V.