Holy shit, this is solid advice from Holly Lisle.
Essentially, she's telling us to look at what we wrote and understand it. What was it about? What point were we trying to show? And do we understand the part each important character plays in communicating that idea? And after doing the work of figuring out what we were trying to say, we absolutely need to make sure that everything that happens in the work takes it further toward the goal.
I don't know that we have to accomplish this is one Death March of a revision pass. I've heard a publisher talk about doing a dozen revisions, each for one component of Lisle's plan. It doesn't matter if you do it all at once, or element by element. But it has to be done, or your work is never really finished.
But perhaps most important is her final point:
"The definition of a writing career is: Write a book. Write another book. Write another book."