What Disk Utility is actually good for
Disk Utility is a tool built into every Mac that you can use to format an external drive for a specific purpose, or to check a disk for file system errors and repair the ones it can fix on its own.
Formatting an external drive erases everything on it
Because erasing a disk removes all of its data with no way to get it back, always copy anything important off the drive somewhere else first. If you're not sure which format to pick, APFS makes sense for a drive that will only ever be used with a Mac, while exFAT is the safer choice if it also needs to plug into a Windows PC.
Frequently Asked Questions
If I erase a disk, is the data on it gone for good?
Yes -- erasing removes all the data on the disk, so make sure anything important is backed up elsewhere first.
Should I pick exFAT or APFS?
APFS is the better fit for a drive you'll only use with a Mac, while exFAT is the more compatible choice if the same drive also needs to work with a Windows PC.