Treasuries are an Etsy creation. Basically it is a grouping of Etsy items put together by random members of Etsy. They come with a certain protocol. It is in bad taste to put your own items in a treasury that you create. Even so, treasuries are a very popular way to promote Etsy items. There are entire teams devoted to creating treasuries made of their members items. Here is a link to a treasury I put together last night.
Collections are exactly the same except they are on Artfire instead of Etsy. My multi-blue bracelet is being featured in a collection this morning.
And the links to my Etsy and Artfire shops were you'll find my multi blue bracelet:
One of the main ways that people shop on Etsy is by browsing through the treasuries. Therefore, if your item appears in a lot of treasuries, your exposure is increased. The goal of everything sellers do on these sites has to be increasing your exposure. The greater number of buyers who see your items leads to higher probabilities that your item will sell.
I don't really know if treasuries and collections increase your sales but I do know that it warms my heart to know that other artisans think enough of my work to feature me in their collections.