Need help understanding the role of a short-term bond fund

My company's 401(k) offers only one low-cost, indexed bond fund, which is Vanguard's short-term investment grade bond fund (VBIPX).

I've asked this question here and there but never good a definite answer: is it good as the sole bond fund for my bond allocation?

The main things I have trouble figuring out are:

1. Does it make sense to hold this kind of fund long-term?

2. Does it keep up with inflation?

I'd appreciate if someone could shed some light on that.