How does genetic variation contribute to the diversity of organisms

Genetic variation is exactly what it seems to be— variety in genetics. Most eukaryotic organism reproduction must have two parents in order to create offspring, and because of this, their offspring all varies genetically. All of their offspring is different, because of all the different ways and patterns DNA can combine. So if every organism is different in their genotype (their DNA and genetics), there will be variety in organisms, leading to diversity. No organism is the EXACTLY the same. No organism has the exact same genetic coding (unless they are prokaryotes). The world is full of species, and all members of a species are completely different from one another.
Hope this helped a little :)