This question does not have a definitive answer. Experts in cut glass research believe it is originally a German pattern. It was called various things in England and America, before it became known as hobstar. It was referred to as "fancy star" in America and "jewel star" in England. The first official record found for the name hobstar in America is a patent from 1902.
As to its significance, it was created using 3 overlapping sets of parallel cuts, which takes considerable skill and the resulting pattern resembled the hobnail on the bottom of a boot or shoe. It was most popular as a pattern during the brilliant period of cut glass and then was widely imitated in pressed glass. The pattern was not as popular in Europe, although it has been found in Baccarat cut glass as well.
It is possible that more research needs to be done to verify the German origin.
