The extended h-pawn is used to force Black's very strong bishop off the board, basically. It does afford a bit of extra kingside space to the point where White has quite a bind there, but one of the perks of the main-line Caro-Kann (in this case, I've known this as the Capablanca Variation) is that Black will endure and make the h-pawn a target in the endgame.
caro question
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I may end up messing up this move order, but i have no idea what is going on in this line and was hoping someone might shed a little light on the subject for me. Questions are in the annotations ... Ozzie?