To understand why a rebuild is necessary, you must understand what the database is. Your PS3 does not just "read" the hard drive like a USB stick. Instead, it indexes every file, game save, theme, and trophy into a system file (specifically data.est).
Over time, as you install and delete games, this index becomes fragmented or corrupted. When the console tries to locate a file, the index points to the wrong place, resulting in: ps3 database rebuild pkg
A Database Rebuild wipes this index and forces the PS3 to scan the hard drive from scratch, creating a brand-new map of all your files. It is effectively a "defrag" for your system software. To understand why a rebuild is necessary, you
Cause: The PKG itself is corrupt or incompatible with your firmware.
Fix: Delete the problematic PKG from Game Data Utility, then re-download or reinstall it. A Database Rebuild wipes this index and forces
Connect your controller to the PS3 using the USB cable and press the PS Button. You cannot navigate this menu wirelessly.