Noun verbs a-gerunding - the meaning of the "a-gerund" form?

The first time I saw this antiquated form was in Steeleye Span's interpretation of The Elf Knight ballad, but I tend to see it now and then and I don't quite know how it is used.

Lady Isabel sits a-sewing
Fine flowers in the valley
When she heard the elf-knight's horn a-blowing
As the rose is blown

What is the name, role, history (how it came to be, and how it died) of that prefix? Does it affect the gerund in any way, modifying its meaning or such, or is it just "the way it was spoken back then"? Is this related to the indefinite article a put in front of normal nouns, treating the gerund as any noun, or is it something completely different?

It's not a gerund; it’s an ordinary present participle describing an ongoing action. That is, the horn is blowing; it’s not “[she heard] a blowing [of the horn]”. Sewing is more obviously not a noun in the poem.

The a- prefix is there purely for rhythm and metre. It signifies nothing.

Perhaps surprisingly it doesn’t even feature in one of the six OED definitions for a- (prefix). That said, it is similar to a (int.)¹:

3 Added after the rhyme word at the end of a line in a ballad, song, etc., for metrical reasons.

Where a is used after the rhyme-word, it provides a weak foot in the metre. The a is fulfilling the same function in your extract: to provide a weak foot in the metre.