Custom forms are used to collect specific information from visitors on your website. For example, most websites have a contact us form where they allow visitors to send a message via the website. This form typically has fields such as name, email, phone, and message. With custom forms you can create forms like a "contact us" form but add any number of fields. If you wanted to add another field such as birthday you could do so. Custom forms can also be attached to event registration. So you can create a form that would collect the specific information needed for a summer VBS program and this form would be part of the sign-up process for people who sign-up for the VBS program.
Custom form limits are placed on the number of unique forms you have created and not the amount of times the form is used. For example you can have a general custom form that you use on 10 pages on your site, but that is only 1 form. So if you plan limits you to 5 forms, you would have 4 more custom forms available for you to create and place/reuse on any number of pages. So no matter how many pages you place the form on, it still only counts as one form.