The index of summation $i$ is just a dummy variable that runs through the values $1,2,\dots,n$ and lets us summarize the expression
$\left(\frac1n\right)^3\left(\frac1n\right)+\left(\frac2n\right)^3\left(\frac1n\right)+\left(\frac3n\right)^3\left(\frac1n\right)+\ldots+\left(\frac{n}n\right)^3\left(\frac1n\right)$
as the single expression
$\sum_{k=1}^n\left(\frac{i}n\right)^3\left(\frac1n\right)\;.$
The points $C_i=\dfrac{i}n$ for $i=1,2,\dots,n$ are the right endpoints of the intervals $\left[0,\frac1n\right],\left[\frac1n,\frac2n\right],\dots\,$, $\left[\frac{n-1}n,\frac{n}n\right]$ into which we’ve subdivided the interval $[0,1]$, and the numbers $f(C_i)$ are indeed just the values of the function $f(x)=x^3$ at those points. The function value $f\left(\frac{i}n\right)$ gives us the height of the rectangle whose base is the interval $\left[\frac{i-1}n,\frac{i}n\right]$ and whose height is the height of the function at the right endpoint of that interval. This area approximates the area under the curve between $x=\frac{i-1}n$ and $x=\frac{i}n$, so the summation, which adds up similar approximations for all of the small subintervals, approximates the total area under $y=x^3$ between $x=0$ and $x=1$.
The final step is taking the limit of better and better approximations over finer and finer subdivisions of $[0,1]$.
The points $C_i$ were found by dividing the interval $[0,1]$ into $n$ equal pieces and finding the right endpoints of those pieces. Since the length of $[0,1]$ is $1$, each piece must have length $\frac1n$. The first begins at $x=0$, so its right endpoint must be at $\frac1n$. The next begins at $\frac1n$, so its right endpoint must be at $\frac1n+\frac1n=\frac2n$. The third begins at $\frac2n$, so its right endpoint must be at $\frac2n+\frac1n=\frac3n$. Continuing in this fashion, you can see that the right endpoint of the $i$-th subinterval must be at $\frac{i}n$.