The Avatar State is a defense mechanism, designed to empower you with the skills and knowledge of all the past Avatars. The glow is the combination of all your past lives, focusing their energy through your body. In the Avatar State, you are at your most powerful, but you are also at your most vulnerable.
It is your nature, your legacy. But there is a bright side. What happened generations ago can be resolved now, by you. Because of your legacy, you alone can cleanse the sins of our family, and the Fire Nation. Born in you along with all the strife is the power to restore balance to the world. - Iroh to Zuko