Long term duration - they think that your condition has/will continue long enough to meet the CPPD condition of being “prolonged”.
You will continue to receive LTD. Expect occasional forms requesting updates on your condition from you and your doctor. If you do qualify for CPPD, then your insurer will deduct the amount of CPPD from your monthly payment and pay you the rest. CPPD is taxable though so if your LTD was not taxable, you may end up out the cost of taxes. Also consider applying for the disability tax credit (DTC) if you qualify - it will reduce your taxes and also let you open an RDSP and get grants and bonds from the government.
You can wait for the CPPD instructions letter or just apply on your own. Usually the insurer includes some information to increase your chances of success but frankly David Brannen’s (the lawyer who runs this website) guide to applying for CPPD is much better. Poke around their website as well for some other tips for applying.
It will not prevent your return to work if you are able to. CPPD has some features designed to encourage and assist people with returning to work - like if your return to work fails, they will restart your CPPD quickly without going through all the paperwork again and so on. Read more here: Canada Pension Plan Disability Benefit - Vocational Rehabilitation Program - Canada.ca