Grammar

"et on paye une caution que l'on récupère à la fin." This sentence means one/we pay a deposit that one/we get back at the end. Can someone explain why it's "que l'on" instead of just "que on" for that we/that one? What is the l apostrophe for? Thank you. 

The purpose of the l'  in que l'on is strictly euphonic. It avoids the hiatus (the pause associated with adjacent vowel sounds). That it to say, que l'on is both more pleasing to hear and easier to pronounce (in a fluid manner) than que on would be. It's worth noting that this particular euphonic is optional, as you will also see qu'on used in this situation. Que l'on is considered to be the more formal. You may also see l'  used in front of of the indefinite pronoun, un. But, again, this is optional. The important thing is that if you do see l'un  (at the beginning of a sentence, perhaps),  it just means un.

There are many instances of this in French, employing t's, as in :

y a-t-il  and que se passe-t-il.  These are examples of what's officially referred to as le T euphonique,  which is required whenever a verb ending in a vowel is followed by il or elle.