Someone explained to me that cross sections define the size of the explosions at distance x from the centerpoint of the ship. Or, in other words, when the wiping effect runs during ship explosions, the code looks for the nearest cross section defined in the model file, and uses the associated radius to determine the size of the fireball.
So if you have a pyramid-shaped ship with the centerpoint near the base, you'll want to make a cross section with a large radius but small depth (to cover the wide base) and then a cross section with a small radius but bigger depth (to cover the thin peak). Might need to switch radius and depth though; I've never tried to use the feature myself so I'm not sure.