His saying: "I acknowledge before you all the blessings you have bestowed upon me,"
Means: I recognize the magnificence of what You have bestowed upon me of your bounties as well as the consistency of Your grace and generosity. This is an expression of thankfulness to Allah, the One who bestowed His bounties to make sure one is pure from being ungrateful of the bounties.
“I confess to you all my sins.” Meaning: I admit my sins, they are indeed wrong doings done by me, either shortcomings in obligations or doing prohibited deeds. Admitting ones sins and shortcomings is a path to repentance and always doing so. And the one that recognizes his sin and repents from it will have Allah turn to him in repentance.
His statement:"…so I entreat you to forgive my sin” means: Oh Allah, forgive all my sins for definitely Your mercy is all-encompassing, Your pardon generous, and no sin is so great that You would not forgive You are the Oft-Forgiving and the Oft-Merciful and none forgives sins except You.
Allah the Most High says: “And those who, having done something to be ashamed of, or wronged their own souls, earnestly bring Allah to mind, and ask for forgiveness for their sins,- and who can forgive sins except Allah.- and are never obstinate in persisting knowingly in (the wrong) they have done.” Also, the Prophet (Peace and blessings be upon him) closed this supplication by stating the tremendous reward for the one that is consistent upon it every morning and evening. Thus he said: "Whoever says it (i.e. these words) during the day with firm faith in it, believing in it as it is the words of the infallible who does not speak out of (his own) desire, it is no less than inspiration sent down to him, (may Allah send many blessings and peace upon him) and died on that state the same day before evening, he will be from the people of Paradise; and if somebody recites it at night with firm faith in it, and dies before the morning, he will be from the people of Paradise.'
The reason the one who recites this supplication regularly acquires this generous promise and great reward, is because he starts and ends his day with the Oneness of Allah in His Lordship and Divinity and to recognize servitude to Him, to ponder upon the grace of Almighty Allah and to acknowledge His bounties, to review the faults of the soul and its shortcomings, to seek forgiveness from the Oft-Forgiving while standing with humility, submission and humbleness. Which are honorable meanings and gracious characteristics with which to open and seal the day, and whose owner, or the regular observer, is worthy of forgiveness and pardon as well as deliverance from the hellfire, and gaining entry to the heavenly Gardens of paradise. We Ask Allah of His favor.