It gives you the coefficient for the term. So (5 C 1) gives you the coefficient for the 2nd term (because (5 C 0) is the first term). The rest of the term is the x and the y. Remember that the first term is x^5*y^0 (which equals just x^5). The second term is x^4*y^1. The third term is x^3*y^2. See the pattern? This works for any exponent in the binomial. The x term exponent starts at the exponent in the binomial while the y term exponent starts at 0. Each successive term, the x term exponent decreases by 1 while the y term exponent increases by 1, until the last term is x^0 * y^n.
Remember in this problem that x really is 3x and y really is -2y. So when you take your second term which should be 5x^4*y^1, it is really 5(3x)^4(-2y)^1.