What does changing config.assets.version number do?
I understand that the assets expire (as it is written in the comments) but what does it do in the background?
would it delete all the compiled assets? or does it take that version number and uses it somewhere else?
It will precompile assets with another fingerprints (the code appendend to the file name), making all the client's browsers download the files again.
In other words, as you said, it expires the caches in the client's browsers.