The Other Languages... item under Language & Region lets you configure your device to work with other/additional languages.
As observed under Other Languages... screen, there are two section. This means that there's two kind of support for languages. For the sake of understanding let's call them as below:
The languages listed under the first section, IPHONE LANGUAGES are fully supported by iOS, the operating system running on your iPhone. This means that if you select a language from this list, most of the textual items/instructions in your iPhone will use that language. Basically, selecting a language from this list lets you change the device language.
You may wish to refer to the Apple Support article, Change the language on your iPhone, iPad, or iPod touch
On the other hand, the languages listed under the second section, OTHER LANGUAGES aren't supported fully by iOS. This means selecting one from it won't change the interface language of the device and you'd continue to see the textual items/instructions in your iPhone in the language selected in first section (device language).
However, the selection from OTHER LANGUAGES list is used by internationalized apps and websites. If you select a language from this list, apps and websites with content localized in it will be display it in the selected language.
When setting it up for the first time, your iPhone chooses the default language as device language corresponding to your locale.
A follow up: When I develop an app or website for iOS, languages of which list should I be aware of?
A generally followed practise is to create the app (content) in English and localize it to work with all the languages your target audiences uses/expects to use it in.
It is recommended to refer to the Apple Developer document, Internationalization and Localization Guide