It is size and quality indicator.
Modules are set in order of size (numerical value, 1 being the smallest, rising up, up to size 8) and quality (E being on the bottom, A being on the top - a bit more about it later).
Ships you have in 3 sizes: small, medium and large. Small ships, like Sidewinder, Adder, Cobra, Vulture, etc. have rather small modules slots and limitations. Big ships, like Anaconda, Cutter, Corvette, T-9, etc. have more slots and larger ones. Number in slot description indicates what is the max you can fit in. You can fit smaller module no problem but then you are limited to this module performance. It's sometimes intended (for exploration namely) to fit smaller power plant than module slot allows.
Next thing is lettering value. It shows the "quality" of module. And it's performance. E-rated is generally the worse stat and performance wise but the cheapest one. D-rated is the lightest one but can have heat and integrity issues. A-rated is best performance but the most expensive.
Ex. Frame Shift Drive module slot (FSD) in a Python is class 5. It means you can fit anything from 1X to 5X FSD module there. The bigger in number, the better range you get. Now let's say you decided to focus on 5-grade. You have 5E (the worst) by default and exchanging it to more expensive but lighter and better 5D will grant you increased jump range. Fit 5A and you will get the most possible range, before engineering and Guardian FSD booster.
Note that some things don't have the full lettering range - cargo slots are all E-rated despite having size range from small 1 (2 tones of capacity) up to 7 size.
And dots - it is just a visual representation of maximum slot capacity. Not that each slot of your ship has set of those. If your module match the amount of dots then you have the largest possible installed. If your module is smaller than the slot, remaining dots will be hollow. It is seen when you install 2-size module in like 5 size slot.
In short:
- number is a SIZE (the higher the larger)
- letter is QUALITY (A through E, descending order)