Study the Haas Mill workbook, available in pdf format on their website. A lot of the information presented is generic sort of programming information.
In general terms, the R2 is the Return plane, and represents the height where the tool makes a rapid move to before it begins the feedrate drilling motion. If this is a metric file, then R2 represents 2 mm of clearance of the tool tip above the surface.
Now prior to calling the G81 cycle, the tool is typically positioned much higher above the part, for safety reasons. Your sample program does not show us this value, but typically, it might be at Z25 mm.
G98 will cause the tool to retract to the Z start position when the cycle was called. So the tool will go safely up to Z25 between each hole. The tool might then safely clear any clamp or bolt that is less than 25mm high on this operation.
G99 will cause the tool to retract only to the R plane, which would be only 2mm clearance between positioning moves. This is fine for drilling many holes in a large flat area with no concern for the tool running into obstructions.
And finally, yes the program would drill a total of 5 holes before the cycle is cancelled with the G80.