The first wand button creates an outline around areas filled with a consistent color.
You can also use the wand during an ‘Add Hole’ operation.
Normal graphic fills, such as those from a cartoon image will not need a high sensitivity to the color used. You can reasonably use the default number. If the image is scanned from a print, you might need to increase the sensitivity a little. Try different levels to see what you get. Note that some large images with a high value for sensitivity can take longer to wand.