What is the benefit or use in having a high leadership or diplomacy inside a faction?
As in when you have (CO) of 5 you are a valuable prospector. What is it for these two skills?
High skills doesn't matter whether your in a faction or not, so not entirely sure what your after. The skills them selves give a reduced cost to buying NPCS (diplomacy) and reduced csontruction time (leadership) at least at the moment.
Well say you were going into some diplomatic field, would the added skill points help you in any way? I use the prospecting analogy because no one will want you as a prospector if you have a (CO) of 1, so I'm wondering if the same goes for a diplomatic leadership type role.
Did you look at the Character Skills rules page? Each skill lists the aspects of the skill that are currently implemented (you can ignore anything that refers to combat or other non-implemented features).