As Bernard said, debugging shorts is really helped by being able to subdivide the layout. Even without circuit breakers (although I do recommend them), just being able to disconnect the feed to a block and see the problem go away will help speed up finding the actual cause.
The other reason is power. A typical booster puts out 5 Amps (there are larger ones, and smaller ones like the Zephyr), and a typical N-scale train probably draws a bit less than a half amp (trains with passenger car lighting using bulbs probably draw well over 1 amp). So, once you get more than about 8-10 trains running on a layout, you'll need a booster. And having blocks lets you easily connect some to the original supply, and others to the booster.
It's a good idea to insulate both rails at a block boundry, although you can get away with a common rail and one insulated rail, but that makes diagnosing problems harder. Also, you need to be careful about "phase" (i.e., the rail on either side of the insulator should be connected to the same source or to the matching output on a booster, unless you're wiring a reversing section). I've heard of people having problems with insulated Unijoiners shorting on curves, so putting the insulators between straight sections of track is a good idea, although I don't know how common a problem this really is.
It's also a good idea to feed track every six feet or so (2m) to avoid voltage drops in the rail. DCC with multiple trains exacerbates this problem, but I've seen it happen on DC track with more than 20' from the feed visibly slowing a single train. There's no problem with multiple feeds to the same block, as long as they come from the same power source and you keep the phase correct. And the bus wire to the feeds should be at least 14 gauge (about 64 mil diameter) for a reasonably large N-scale layout (larger with really long runs, or more than a 5 Amp supply).
There's a really good page of tips about details like that at:
http://www.wiringfordcc.com/I don't necessarily agree with everything he says, and some of his tips are more relevant if you're building a permanent layout you expect to keep for decades without changing it, but he has a lot of good info.