The region is emacs speak for the part of the text that you would (essentially) consider to be "highlighted" in a "normal"/GUI text editor.
You can read more about it in The Mark and the Region in the emacs manual.
As far as I know, there is no equivalent to the matlab behavior you are describing. The few times I have used matlab, though, I do recall finding it handy when poking at a problem using ad hoc scripts.