I don't seem to understand what perturbation theory really is, and what it is needed for. Can someone please provide an explanation for what it is, and why it is needed in QM?
There are two main reasons.
The first is practical, and it is that QM is hard. Very few systems are solvable, particularly in the presence of interactions. There's a wide variety of situations where perturbation theory is the only available way to make any headway at all.
The second one is conceptual and it is basically that it allows us to establish a hierarchy in the strengths of the different components of a system, and it allows us to have a clearer picture of how this strengths scale with the parameters of the system. Thus, even if you can solve the full system, if one component is weak, it often makes sense to treat it explicitly as a perturbation, so that you can keep a clearer track of how the different aspects of the solution (energies, eigenfunctions, dipole moments, what have you) scale.