The second one is starting position. Here we have to calculate it; author of the query wanted to find the first occurrence of the colon (:) sign. To do that, we have used the INSTR function. "+1" means "start from the position of the colon sign plus one more character". In our example, it is the character 'd' or, in numbers, 4 + 1 = 5.
Finally, the length: in this example, we want to take all characters to the end of the input string. It is "length of the whole input string MINUS position of the colon sign", which is then 7 - 4 = 3.
Having that in mind, this query could have been rewritten as
2 substr('abc:def', 5, 3)
3 from dual;