This phrase creates some questions for me. The place it is mentioned is in rule 8.3.
"Only non-CV naval units in the battle hex are considered for this calculation (for example, a BB naval unit in the battle hex counts, but a BB naval unit that is escorting the distant carriers which also participated in the battle does not, since it did not contribute its attack values for the battle)."
The wording is confusing on this but I get the gist of it. Basically you can have a non-CV naval unit (e.g. battleship) escorting the carriers that are sitting outside the battle hex shooting in.
#1 Are the distant non-CV naval units participating in the battle?
#2 Can distant non-CV naval units be selected to receive hits?
#3 Can the reaction player send non-CV naval units to escort distant carriers though they won't directly participate in battle?
Not sure on this one, but suspect yes. I've never seen it done though since reaction player is limited in number of units that can be sent to the battle and usually tries to maximize the amount of firepower that is actually counted in the battle to do maximum damage to the attacker.