The flywheel on your small engine was originally designed to store the momentum from combustion to keep the crankshaft turning in between the engine's power strokes.
Flywheels on today's small engines serve several other purposes. The fins help cool the engine by distributing air around the engine block. The fins also blow air across the air vane on a pneumatic governor, maintaining the desired engine speed (see "Governor System"). Magnets mounted on the outside surface of the flywheel are required for ignition. On engines with starter motors, lights or other devices, magnets mounted inside and outside are at the heart of the electrical system.
Finally, if a lawn mower or tiller blade hits a rock or curb, the flywheel key can sometimes absorb the damage, reducing repair costs significantly. Always check for damage by removing the flywheel to inspect the key and the keyway, the key's slot on the crankshaft. The soft metal key must eliminate play between the flywheel and crankshaft.