What is the significance of naming? Why does God have Adam do it, and why is this activity described at all?

Because Adam, in addition to being a tiller of the land, is also a practicer of animal husbandry, and this naturally requires some notice in an origin account. As man was already said (Gen 1:26-28) to have dominion over animals of various kinds, here is the first instance of exercising that dominion. Throughout the Bible, naming is associated with authority. So, for example, Daniel and his friends are renamed by a chief official (Dan. 1:7); and Jesus renames Simon as Cephas (translated to Greek and then to English, Peter; e.g., John 1:42). In the same way, by naming animals, Adam (at God’s behest) claims authority over them.