(Chapter 2) What is the significance of the "snake thing" or "beastie"

The snake thing or beastie is a figment of their own personal fears. They project their fear and insecurities on to an external "monster". This helps put their insecurities into some kind of understandable context. It is really Simon, the Christ-figure of the novel, that understands that the beast on the island is actually inside the boys.