So basicly, when your body continuesly gets shaken up the whole day, your bones creat these things called micro fracture (or something like that). Micro fractures are tiny breaks in your bones, that when recover, make stronger bones. Do you guys remember that freak acident that happened to that basketball player's leg a while back? I'm guessing that he practiced to much, getting a lot of micro fractures, then didn't haveenough recovery time. So thats one resone why you need recovery.
Another reason is that muscles are like a group of strings. When you workout, you stretch them to the point some are torn. When your taking a break they recover and new strings are built around it to make it stronger so it won't tear again. Thats when the muscles get bigger. If you don't take breaks they would not get enough time to recover. Therefore, you won't benefit out of your workouts.
Same weight more repetition= small muscle, toned and stronger
Reducing repetition, increasing weight= bigger, strong and rounded muscle.