The most common attack to servers is to brute force guess your password. An effective way to counter this is to disable login via username password. An alternative way to login after doing that isto use ssh key pair login.
We are usually familiar with FTP when we transfer files from our computer to a shared web hosting service. With VPS, it usually have an ssh server that's why we can log in to a terminal. The ssh protocol supports transferring of files called Secure copy (scp). We can just reuse this service and there is no need to install a new program to your VPS.
Only basic commands can be done in your VPS control panel. To really use the full potential of the server, you need to log in to it's command line. From the command line, you can do many things such as: install software, modify configuration, and manipulate data.