In this hadith, the Prophet (SAW) emphasizes the importance of cleanliness and protecting oneself from urine.
He mentions that the past nations, specifically Bani Israil, had much stricter rules. If a bit of urine fell on their clothes, they would need to cut that part of it and throw it away.
We have it much easier in the terms that we can just clean the clothe without needing to cut off a portion and throw it away.
The Prophet (SAW) mentions the consequences of not obeying the prescribed laws of being clean from urine. A person of Bani Israel discouraged people from following their law (cutting of the part of the cloth and throwing it away), and as a consequence, he will be punished in the grave.