Is App-Specific password necessary for normal use?

They are only needed if you have a 3rd party (i.e., non-Apple) app (not an internet browser) that needs to sign into your Apple ID. The main example of that would be a non-Apple email application that accesses your iCloud email.

Also see the following from Using app-specific passwords - Apple Support

App-specific passwords are passwords for your Apple ID that let you sign in to your account and securely access the information that you store in iCloud from a third-party app. For example, use app-specific passwords with mail, contacts, and calendar services not provided by Apple. 

and

If you're signed in to iCloud for Windows, you don't need an app-specific password when using your Apple ID with third-party Microsoft apps.