The contact point is crucial to everything - power, accuracy, and stability. Your entire muscle system works to generate momentum, but that energy has to culminate at a very specific moment in time, hence your contact point. Striking the ball too close to your body means that your swing did not reach it’s peak momentum. Striking the ball too far away from your body means your energy dissipated into thin air before it could reach the ball.
At your optimal point of contact, you should feel the racquet almost “snap” through the hitting zone like a whip cracking and releasing the built up energy. It’s the same “snap” that Mike Tyson gets on his uppercut or Barry Bonds with his baseball swing, where every ounce of energy is unleashed upon a precise target at a single moment in time.