Cool - let me try again.
At a high level - it's referring to individual webservers as "nodes"
"local node" is referring to a locally hosted file system (not shared across multiple webservers) on a single webserver.
If you think about this in the context
of "old school" clusters it might make more sense.
eg a bare-metal web server
with a hard-drive in the server - the hard-drive in that web server is "local" to that web server.
In an old-school cluster you'd have a separate file server in the rack with it's own hard-drive and you would share that file server across all your web servers. accessing this file-server is slower than accessing the local disk on the web-server itself.
Some things (like student uploaded files/images/videos hosted on the site.) have to be available to all webservers so you put it on the slower "shared" disk.
Some things don't need to be stored on both servers and can use the faster "local node" or faster local file system.
localcache is basically a "bucket" used by multiple things in Moodle when the developer writing the code decides "this doesn't need to be on shared disk - use the fast option"
does that help?