Rashi explains that the point was to show off the Hidur Mitzvah that they had employed in order to beautify the Sifrei Torah that they wrote. This is meant to encourage Hidur Mitzvah. I believe the significance of this being on Yom Kippur is to show how much we love Hash-m that we go beyond the letter of the law and beautify the Mitzvos as much as possible. This surely is a merit for us on the Yom ha'Din that Hash-m should act towards us with love and kindness.

As an aside, I will mention that Rav Elyashiv (quoted by Rav Zilberstein shlit"a in Chashukei Chemed) said that from here we see that it is fitting to have competitions for "the most beautiful Sukah" etc. in order that people should be inspired to perform not just Mitzvos but also Hidur Mitzvah.

All the best,

Yaakov Montrose