Trace Queries in Datadog APM allows developers to filter and analyze traces based on trace-level attributes, service relationships, endpoints, and other properties. This feature helps users pinpoint the root causes of performance issues, measure end-to-end latency, and track the business impact of application performance. By enabling quick analysis of the impact of performance issues, Trace Queries assists in prioritizing troubleshooting efforts and optimizing infrastructure based on business interests and KPIs.