The replace of all occurrences of \" is for something like "File \"%s\" not found!"
Find MatchCase "!"
Replace All SelectText "ExClAmAtIoN"
Your version of UltraEdit does not support find in selected text like UltraEdit v14.00 and later do. But that is not important here. Find+Replace are just on 2 lines in the macro editor for supporting multi-line search and replace strings. In real this is just one command, the replace command. If you open the replace dialog with Ctrl+R and look on the options you see that you can choose in the Find Where box the option Selected Text. In your version of UltraEdit this option is available only for the replace command which is the reason why the parameter SelectText (better would be the name SelectedText) must be specified on the replace command line. Both together simply means: replace all occurrences of ! by ExClAmAtIoN in currently selected text only.
And the entire string was selected before with the Unix regular expression search for ".*" which means find a byte sequence starting with a double quote character, followed by 0 or more occurrences of any character except new line characters until another double quote character is found. Well, search string ".+" would be better to ignore empty strings "" which surely do not contain an exclamation mark.
By the way: I just thought about possible problems with this macro and there is one. A single double quote character in a line which contains right the single double quote character also a string in double quotes could result in a wrong behavior if the single double quote character has no escape character. For example something like:
var sText = '\"' + " !!! test !!! " + '\"';
would be no problem. But if you can write in your language:
string2=('"' + " !!! test !!! " + '"')
you would need an additional replace all command at top of the macro to replace all '"' by 'DoUbLeQuOtE'.