It's a representation of their European performance. Rangers are higher than Celtic because they made the final last year.
Performance since when? 90s I assume. Edit, last 10 years apparently....but last time we were in was 2012/2013, so nothing in last 10 years.
I assume it extends to other European competitions. Rangers made the final of the Europa League (I think it was that one) last year. I'm also guessing you get some points for which league you qualified from otherwise we'd have nothing.