What does mast rake do?

Sorry I disagree Alex (unless by straight you mean more upright) in light winds you want flatter open sails which means some bend, no kicker and no cunningham. As the wind picks up you want a straighter mast and wind on the kicker to get the leech working and then as you become over-powered you need to start bending it again, loads of kicker and cunningham.  Rake is different you want the mast more upright in light winds and then rake back as the wind increases.  However, if your rake is adjustable on the water then you rake backwards for upwind and forwards downwind.  If you don't have the ability to change it on the water then you need to set up rake to get the correct compromise between upwind and down for the wind strength.  However, don't rake too much in light winds as it opens the slot between jib and main losing power.

Your class association should be able to give you some general advice.  read Lawrie Smith's tuning your dinghy book, a bit dated now but still a good source of basic general information.

That's a pretty basic summary there are bound to be specific exceptions.

Upwind in hiking weather it seems a good thing. In the medium stuff life still feels better balanced up wind with some rake, but in the light stuff I haven't a clue what's going on. What is supposed to be happening to pointing with mast rake? Is it purely a de-powering thing?

These are on both single handers and double handers with adjustable mast rake around the course. I just reach for the rake control automatically around the leeward mark.