By the "symbol" here is meant the word; thought or reference is concept. The dotted line suggests that there is no immediate relation between word and referent: it is established only through the concept.
On the other hand, there is a hypothesis that concepts can only find their realisation through words. It seems that thought is dormant till the word wakens it up. It is only when we hear a spoken word or read a printed word that the corresponding concept springs into mind.
The mechanism by which concepts (i. e. mental phenomena) are converted into words (i. e. linguistic phenomena) and the reverse process by which a heard or a printed word is converted into a kind of mental picture are not yet understood or described. Probably that is the reason why the process of communication through words, if one gives it some thought, seems nothing short of a miracle. Isn't it fantastic that the mere vibrations of a speaker's vocal chords should be taken up by a listener's brain and converted into vivid pictures? If magic does exist in the world, then it is truly the magic of human speech; only we are so used to this miracle that we do not realise its almost supernatural qualities.
The branch of linguistics which specialises in the study of meaning is called semantics. As with many terms, the term "semantics" is ambiguous for it can stand, as well, for the expressive aspect of language in general and for the meaning of one particular word in all its varied aspects and nuances (i.e. the semantics of a word = the meaning(s) of a word).
As Mario Pei puts it in The Study of Language, "Semantics is 'language' in its broadest, most inclusive aspect. Sounds, words, grammatical forms, syntactical constructions are the tools of language. Semantics is language's avowed purpose"