What does gamerscore mean? Does it have to do with something like gamer level so people can be better matched to each other?
Gamerscore is just an in-game incentive. You unlock achievements in games and they make up your gamerscore. It's not used for anything, apart from comparing yours with friends etc.
A retail game has 1000G when launched and an Arcade Game has 200G. However retail games may have an additional 750G, depending if the developers want to release DLC for their games.
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Nothing to do with matching others, it's just showing your progress on your games and/or legitimately achieving the achievements to show for the community.