Data at rest in information technology means inactive data that is stored physically in any digital form (for example; databases, data warehouses, spreadsheets, archives, tapes, off-site backups, mobile devices etc.)
Yes, all data need protection including data at rest. Anyone can come across the data and your data will be gone. The main reason of encryption is to protect the data from being used by a person who was not intended to use it.
Yes, it is essential to encrypt data at rest. It is a bit difficult to explain the necessity of encryption at rest briefly. The following link may clear all of your doubts.