Links are how crawlers find your pages and how authority moves between them. A dead link wastes both; a missing one leaves a page stranded.
Search engines read every part of a link. Each part has its own rule.
Every click away from the homepage is one more link a crawler has to follow. Pages with no path at all are orphans.
Nearly every broken link traces back to one of these. The cause tells you where the fix belongs.
Anchor text is one of the clearest hints about the target page. The same link, labelled five ways:
Both, in order. Update the link at its source so it points straight to the right page. Add a 301 for the old URL too, so outside links and bookmarks still land somewhere useful.
A small one. It works, but every hop adds a request and delays crawling. On a large site those hops add up, and pointing links at the final URL removes them for free.
Indirectly. They are mainly a quality and user-experience problem: a page full of dead references looks unmaintained. They are cheap to fix, so fix them.
A link, or hyperlink, is a reference in a web page that points to another resource, written in HTML as an <a> element with an href attribute. In search engine optimisation, internal links connect pages on the same site and anchor text is the visible, clickable label. Search engines use links both to discover pages and to understand how relevant they are.
Free to start. Each finding comes with the page it sits on, so every fix is one edit.