So that we're on the same page, you're wanting to setup Squid as a proxy and connect to it from your local PC/Mac, correct?
If so, the step your referencing exists to setup an ACL, or Access Control List, which sets your local IP as the only IP that's allowed to connect. The guide assumes you do not have a Static IP from your ISP and is recommending that you create an account with no-ip so that you have a more static address.
Most ISP's don't provide static IP addresses unless you're a business client (I know Charter is that way where I am, as is Comcast), so to ensure that you're able to connect to the proxy, you need to setup a static way of connecting.
If you don't setup an account with no-ip, or a similar service, and your IP changes locally, you may not be able to connect to the proxy. If you don't setup the ACL on Squid, then pretty much anyone could connect to and use it instead of just you.
As for automation, you can use a Bash script to automate most of the installation and setup and then upload that bash script to the server and run it, but you'd need to manually handle the no-ip part unless they have an API you can connect to that will allow you to pull down information.
A simple bash script to update & upgrade packages, then install squid, for example, could be as simple as:
sudo apt-get update \
&& sudo apt-get -y upgrade \
&& sudo apt-get -y install squid