how to understand registry in PAL?

Hi,
Newbie question:
for example:
[RegistryKeys]
test1=HKCU\Software\AppName

the [RegistryKeys] function of PAL, in my understanding, is like:
when portable software starts, double-click "test1.reg" to import to registry and backup what's originally there,
and when portable software quits, delete what's imported, then restore the backup.

If I understand right, why specific location "HKCU\Software\AppName" is needed? There could be hundreds of lines and dozens of locations in "test1.reg", not just one location.

Please help me out, thanks.