It's actually a way of teleporting to the other side of the cliff so you don't have to run through South Gustaberg. There are similar ones to get behind Banishing Gate #2, as well as to skip running through the Glacier to reach the NW Eldieme entrance for BRD AF/Coffers/Tele-Mea quest.
Order of the Blue Gartr • View topic - Lycopodium NPCs and strange lights? - Short version: Find the same twinkling lights in the past, there will be a NPC Lycopodium there as well in the past. Upon talking to the NPC(and maybe the light too to be safe) in the past you will 'activate' that light. Next, go buy an Asphodel(it's a flower) from the Goblin outside of the MH in Southern San d'Oria[s], 100g each. Trading the flower to the present-day version of the sparkling light will teleport you to the other side of the cliff, shortcutting the normal path taken to get to that spot. Each time you use it costs an Asphodel.
Edit: Ding! Brain of Knowledge! Going to make my g/f call me that now.
