The purpose is to make everything sparkle and look awesome.

[Undyne will take any opportunity to sparkle like a shoujo princess, so thanks Dhaos for making that happen!! In fact, she's staring at him now with a gleam in her eye that outshines even all the glitter now falling around her.]

Hey. Hey. If we got enough jars, could you summon a wind of glitter that covers the entire town?