Siding question

So I'm having to repair some extensive water damage on my trailer and now I'm at the point where I want to put the siding back and noticed the penetrations through the exterior walls have a strip of rigid reflective insulation material about a quarter of an inch thick around them and I'm wondering, is it necessary and what is its purpose exactly? I'm also wondering if something can be substituted like roll foam weather-stripping or I have I rubber weatherstripping material available to me right now for nothing. I spend more time trying to resolve these small issues and less actually building. Would like to go camping instead...

Thanks, Chris