It means that your app must look nice on retina devices (with higher resolution) and iPhone 5 (with larger screen).
They want to guarantee every user the best possible experience with the application they download / buy.
If the scaling results in a crappy look, it will likely be rejected. If it doesn't look crappy… well, it's the App Store, so you never know… it may still be rejected for not following the rules. Unless you become famous, that is.
Pulitzer Prize Winning cartoons
In December 2009, Apple banned a
cartoon app called NewsToons by cartoonist Mark Fiore, on the grounds
that it "ridiculed public figures."[29][30] In April 2010, Fiore won
the Pulitzer prize for his political satire cartoons, making history
as the very first internet-only cartoonist to win the prestigious
journalistic prize.[29][30][31] Following public outcry after the
story broke in the wake of the award, Apple asked Fiore to resubmit
his app, and it was subsequently accepted. Fiore said, "Sure, mine
might get approved, but what about someone who hasn’t won a Pulitzer
and who is maybe making a better political app than mine? Do you need
some media frenzy to get an app approved that has political
material?"[30]
Source: Wikipedia