I've had this for donkey's years, it is one of the ways that I keep track of how bad the inflammation is.
My understanding -
I don't know how accurate this is, others here will have a better idea I'm sure - is that the whole thickness of the gut lining increases with the inflammatory process as it goes into the three different layers of mucosa, and that is what causes the bulge. It also causes narrowing of the inner diameter of course, so that can cause a buildup of gas, slowing of transit of faeces etc. Eventually it can lead to permanent scarring, and so a stricture I suppose; in my case it comes and goes, so I am hoping there is no permanent scarring.
It seems to always accompany an increase in abdominal pain (not necessarily in that site) and other signs of a flare (fever etc) so I'm pretty sure it isn't coincidental.