Skeletal Mesh Components are used for anything that has complex animation data and uses a skeleton.
Skeletal Mesh Components
SkeletalMeshComponents are used to create an instance of a USkeletalMesh
. The Skeletal Mesh (outward appearance) has a complex Skeleton (interconnected bones) inside which helps move the individual vertices of the Skeletal Mesh to match the current animation that is being played.
This makes SkeletalMeshComponents ideal for things like characters, creatures, complex machinery, or anything that needs to deform or display complex motion. See Skeletal Meshes and Skeletal Mesh Actors for more information on working with Skeletal Meshes.

Above, a SkeletalMeshComponent is used with a Character Blueprint to create a playable character. In addition to specifying the Skeletal Mesh asset to use, you can also define the Animation Mode for the mesh to use (either an Animation Blueprint or an Animation Asset).