The patent name is subtle: "Electronic device with hidden connector." Where the "hidden" comes in is with the use of an elastomer which will effectively block exposed connectors on the device when not in use. Apple wants this material to color-match with the device it's being used on; for example, black or white. Untouched, it shouldn't detract from the device's aesthetics, and it could actually help Apple further its goal of making the exterior of the iPhone as clean as possible.
The polymer used is soft overall, which is what allows a connector to pierce it. A 3.5-inch audio jack might not have to be modified for this use since it already has a pointy end, but Apple may have to update its Lightning connector so that it will have a sharper end (but hopefully not too sharp). Once a connector penetrates the elastomer, a water-tight seal is created, and once it's removed, the material self-heals to create a complete block.
Ultimately, what this could result in is a completely waterproof iPhone which could be dunked in water without fear. Apple can extend the use of this elastomer to the inside of the device as well, to protect sensitive components.
Apple's real challenge isn't likely implementing this material, but instead making it look good enough so that it doesn't stand out. In the worst case, we could see this elastomer pushed a bit inside of a connector opening, rather than be flush with the device. One thing's for sure: whenever this does get here, it's going to be welcomed by many.