Answers:
It's a station identifier. To a radio operator it is like a license plate.
It used to be required of everyone like CB operators too. Now only operators over a certain signal strength are required to have one.
There is no meaning at all. The call letters are given by the Federal Communications Commission. Generally speaking, stations in the east begin with "W" and west begin with "K".
Later: Stations can request certain call letters, but if they are already in use, the FCC will give them others.
For the FCC I guess.
It all depends on the significance of the station. For instance in Pittsburgh they have a station called WAMO. Pittsburgh is famous for the confluence - Three Rivers. It is where the Allegheny, Monogehela, and Ohio Rivers meet.
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