If you're doing a full body workout 6 days a week, you absolutely need the rest week. If you are working different muscle sets each day then it's less important. The body does need time to catch up to the new muscle that you are building.
The body's internal organs have to gain strength to handle working those muscles, and without the rest, your body can never make full use of the muscle you are building and you will reach a plateau that you will be unable to cross.
There are both physiological and neurological reasons to build in rest. Even elite athletes who take on volumes of training most of us would not be able to comprehend have smart periods of lighter training and even full rest periods.
Physiologically training works by stressing the body just enough that the adaptation allows you to recover and the body overshoots a bit so you end up stronger/more coordinated than before. Doing this too much, however, will back fire due to a principle known as GAS (General Adaptation Syndrome). You can read about it here:
Basically it ultimately leads to exhaustion and dramatically increases risk of injury. In training steadily (3 - 5 days per week) for the past 10 years I've had no serious injuries because I build in rest. On the flipside I know people who refuse to stop, believing "more is better" and go non stop ... until an injury has them on their back for months.
Much better to build in the rest periods when you can control them than to end up being forced to rest because you didn't allow your body the recovery it needs.
You'll often hear you are less likely to need rest if you alternate muscle groups. After all, if I work my legs, my arms are resting, right? This isn't entirely true for two reasons.
Reason one: unless you're using totally isolated movements like single arm dumbbells, machines, etc, your other muscles do participate to an extent. Your core is always stabilizing your torso, your leg muscles work to provide stability while your upper body is moving, etc.
Reason two, and more important: every workout taxes your neuromuscular system. There is a neurological effect. This is where the idea of "muscle memory" comes from and the reason why some people can be extremely strong without having large muscles - it's because their neurological system reacts to the workout by improving coordination of motor units, the bundles of nerves that fire to contract muscle (when you lift a heavy weight or a small one, motor units are helping you do that and it's just a question of how many are activated at once). Any type of training will tax your central nervous system and too much training can lead to fatigue. This fatigue can tax your adrenal system and raise cortisol levels, a stress hormone that also makes it more difficult to burn fat. Literally you'll stress your body to the point your metabolism slows, you burn fat less efficiently and stop making strength gains.
So yes, please build in rest. If you train 5 - 6 days per week then a week of light activity is probably fine, but even elite athletes I know try to take at least a week off of ALL training at least once per year. I've found if I train just 3 - 4 days per week then I can go a lot longer without having to take a longer period for rest.