Looking at the pictures of this aircraft, the most obvious problems are with the engines. Because they're not buried in the fuselage like the Raptor or F-35, the are both a radar and an infrared hot-spot. There's also a lot more to building a truly stealth vehicle than shape. Radar Absorbing Material (RAM), selective-frequency radomes, and low-probability-of-intercept radar are all (among many other less-sexy, but no less important) technologies that must be mastered and successfully integrated into the air frame to make it a combat-winning weapon. No doubt this a/c has a lower radar signature than a Mig-29 or Su-30, but would be at a tactical disadvantage to the F-22 (my opinion). Also, assuming this Russian bird doesn't have super-cruise like the Raptor does, it also holds a distinct operational disadvantage. Super-cruise is a force multiplier that is hard to overstate.
Regarding why stealth is important, the reasons are numerous and (mostly) obvious, and range from tactical to operational. The most obvious (operationally) is the element of surprise. Another, tactical, advantage is simply that whomever gets lock first wins the engagement. If your radar can lock up at 30-miles, but your enemy's can't lock up on you until 5 miles, he'll never get a chance to fire.