Code 1 & 2 observations/faults will deem the installation to be unsatisfactory and will have to be rectified to bring the report up to a satisfactory condition.
A PIR / EICR will reveal if electrical circuits are being overloaded, condition of the wiring, carry out visual inspections, find potential hazards within the electrical installation, identify defective DIY work highlight any lack of earthing or bonding, and continue to test the fixed wiring of the installation. This includes checking fuse or circuit breaker ratings and testing the RCDs to ensure they trip under fault conditions.
The outcome from the Periodic Inspection Report will establish the overall condition of all of the electrics (a bit like an MOT on a motor vehicle). It will tell you whether it is satisfactory for continued use and will detail any remedial work that might need to be done, graded by importance with a recommended timescale.