Forgive me for my lack of camera knowledge. There's an option for sensor width which zooms the camera in and out. The focal length option seems to do the exact same thing. What is difference and functional purpose of these two similar options? (Note: it's slightly confusing when attempting to match cameras and one is different from the other even when checking to make the focal lengths the same. My confusion prompted this question.)
Cameras in Blender are made to resemble cameras in real world. The size of the sensor is important when you need to match content created with a real camera with your CG, and that happens really often. Obviously, you might have a hard time to match your camera if you don't enter the correct sensor size. You should search for it online for the specific camera model your content is captured with.
You may also be used to real world cameras so it is easier to reach some desired result if you already know what to expect from some settings or parameters because they match real cameras.
If you have a look, you can see that Blender even comes with lot of presets matching real cameras:
Focal length and sensor width (aperture) are highly misunderstood and abused concepts. The property you are primarily concerned with is actually angle of view or field of view, but Blender does not provide such a camera attribute. Angle of view is the result of combining focal length with sensor width. Ordinarily you will want to adjust your angle of view using focal length since that is most intuitive and consistent with how a real world camera is used. But be aware that focal length means nothing without a known sensor width. A focal length of 50mm in front of a sensor width of 36mm does not provide the same angle of view as it does in front of a sensor width of 24mm. First decide on your sensor size and don't touch it. If you don't know it just accept the default. The only time you need to care about sensor size is if you are integrating real world images with a CG render. Find your desired angle of view using the lens focal length, but don't try to make the numbers mean anything. Just make it look the way you want. If someone says to you, "I want this to look like it does through a 50mm lens", you have to immediately ask them "what is your sensor size?" Otherwise tell them to F*ck off, and ask them how much they want to see in the image (angle of view).