For the benefit
for those of us that are less well-informed, what are the things that the
maintenance diskette can do?

Mainly change a few administrative BIOS settings (like system ID), and do low-level drive formatting. Not normally important tasks for end users.

The other thing that I cannot understand, is why this program has to be run
from a floppy drive. The latter is getting rare these days and if the
program can be run say from a memory stick then it would be much more
convenient.

Since the program is intended for IBM technicians, convenience isn't an issue - it is perfectly convenient for them. Floppy drives are still manufactured and are widely available for under $15, so this is not a real hardship. Plus, many older Thinkpads older won't boot from a memory stick.
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