Why was the delta at the end of the Nile River so important to the ancient Egyptians?

A unique characteristic of this major river is the regularity of its rise each year and the consequent flooding of its banks that are lined with agricultural villages. This is produced by the winter and spring rains (as well as the melting of snow from the mountains) in Ethiopia, which convert the Blue Nile into a torrential stream rushing toward its junction with the White Nile, carrying with it rich silt from the Ethiopian highlands. The Atbara River also adds an increased flow to swell the volume of the Nile. Prior to the construction of the Aswan High Dam, this caused the river to begin to rise in Egypt from June onward, cresting in September and thereafter gradually receding. On receding, the waters left behind a deposit of highly fertile soil in the form of a thin layer of mud.

In a virtually rainless land, Egyptian agriculture was totally dependent upon these annual inundations of the lowlands. An insufficient rise had the same effect as drought, bringing famine; while an excessive rise brought damage to the irrigation works (as well as to homes). The concern of the Egyptians for a desirable amount of inundation is seen in the Nilometers (gauges for measuring the river’s level) that have been discovered at ancient sites. Without these inundations the never-distant desert would press in from both sides right up to the riverbanks. Yet the Nile’s rise and fall has, with few exceptions, been so regular that Egypt throughout its history was noted for its abundant crops and agricultural wealth.

Barely 3% of Eygpt is habitable - the rest is desert. The river was extermely important as a source of water and the annual innundation (flooding) provided fertile ground for crops. The climate of the delta is more tolerable which makes the area the more densley populated. With the creation of Lake nasser and the Aswan Dams this flooding no longer occurs in the same way.

It provided them with fertile soil each year by flooding.

With all due respect to Bilbo, Egypt was a lush savanna at the time of the Pharaohs.