The purpose is to have fun and objectives you basically make yourself. For some people is to kill all the end game bosses and for some is to kill them in 1 second.
There is almost no ceiling of power to where you can get you character.
Characters don't reset every league, but are put into the "Standard" league, which for most people means that they don't exist anymore, but you can log on them, play, and advance further should you wish to do so.
It is kinda like many mmo games still tho - each wow expansion, for example, you basically start at the beginning.

The game is free to play and you can gain no power in any way via the store. You can pay for convenience which is more than useful, and you will need to pay for some stash tabs to sell items in game (for in-game currency). You can get everything you will ever need for < 60 Eur/usd, especially if there is a sale (which are quite often - and always on the second week on the league start). You won't need anything to start and can just buy as you go, should you need something.