The USB light indicates that the micro USB client port is "ready to go". You are cautioned not to plug anything into this port unless the light is on. All of this seems sketchy.
The "L" light is controlled by arduino signal 13. This is driven by GPIO 7 on Gen 2 boards and by GPIO 39 on Gen 1 boards. Yep, the hardware behind the arduino signals changes radically from Gen 1 to Gen 2. Some discussions label this light as "loading". Maybe it is used that way by the arduino support software, who knows.
The "ON" light is driven by a power control signal that comes from the Quark.
The "SD" light indicates SD card activity (I confirmed this by experiment).
Tom's Computer Info / tom@mmto.org