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Circe is important because she is the one who tells Odysseus where he must go in order to reach home. Without her help, he would not know how to get home. She is also important because she is a witch/goddess and Odysseus is able to "defeat" her powers (with the help of the god Hermes). It shows how blessed he is with the gods' help and it shows the strength of his overall character. He is the hero of the epic, and this book proves his physical and mental powers.
The reason there is only one ship left is because of the Laestrygonians. He landed there before he made it to Circe's island. They were giant cannibals who killed all of Odysseus' men and destroyed their ships except for his own crew and ship.
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