What are disk 2 and 3 of the Hulk CDs used for?

I've never played a game that would require two separate disks during play

Then you must be rather young, or at least new to gaming. This was an extremely common practice during that time period (mid 90s thru 2010ish). As games grew in size past the capacity of CD-ROMs, the data was broken down across multiple discs. This usually manifested itself as a prompt during the game "Please insert disc 2" or whatever the correct disc was for that portion of the game.

As DVD-ROMs became more popular, this helped alleviate this issue to some degree, but eventually gaming demands surpassed disc storage again, and multi-disc games became common again.

Today, highspeed internet is so ubiquitous that physical discs are quickly dying. Even games that are purchased as a physical disc will need to connect to the internet to download game files.

To put things in perspective, a doublesided DVD-ROM has a capacity of 9.4GB, and a CD-ROM has a capacity of 737MB. The latest release of Call of Duty requires 175GB of storage space, or about 19 DVD-ROMs, or 238 CD-ROMs.