The mult function is actually defined below main. Because its prototype is above main, the compiler still recognizes it as being declared, and so the compiler will not give an error about mult being undeclared. As long as the prototype is present, a function can be used even if there is no definition. However, the code cannot be run without a definition even though it will compile.
Prototypes are declarations of the function, but they are only necessary to alert the compiler about the existence of a function if we don't want to go ahead and fully define the function. If mult were defined before it is used, we could do away with the prototype--the definition basically acts as a prototype as well.
Return is the keyword used to force the function to return a value. Note that it is possible to have a function that returns no value. If a function returns void, the return statement is valid, but only if it does not have an expression. In other words, for a function that returns void, the statement "return;" is legal, but usually redundant. (It can be used to exit the function before the end of the function.)
The most important functional (pun semi-intended) question is why do we need a function? Functions have many uses. For example, a programmer may have a block of code that he has repeated forty times throughout the program. A function to execute that code would save a great deal of space, and it would also make the program more readable. Also, having only one copy of the code makes it easier to make changes. Would you rather make forty little changes scattered all throughout a potentially large program, or one change to the function body? So would I.
Another reason for functions is to break down a complex program into logical parts. For example, take a menu program that runs complex code when a menu choice is selected. The program would probably best be served by making functions for each of the actual menu choices, and then breaking down the complex tasks into smaller, more manageable tasks, which could be in their own functions. In this way, a program can be designed that makes sense when read. And has a structure that is easier to understand quickly. The worst programs usually only have the required function, main, and fill it with pages of jumbled code.