Ok well shall I start?
It increases insulin sensitivity/insulin action and therefore you need less of it during exercise The effect can last for over 24 hours meaning, in the case of T2 that your pancreas doesn't have to release as much.
Exercise lowers blood pressure, and increases blood flow. It also increases HLD the cholesterol that transports fat away from the arteries. Remember the heart is a also muscle. The training effect of aerobic exercise is often shown by a reduced heart rate .
The increased blood flow is also important in getting blood to the extremities ie hands and particularly feet. This is important in diabetes because it is this lack of blood flow that can lead to unhealing foot ulcers
Losing weight without exercise (especially if there's an element of yoyo dieting) can lead to sarcopenia; ie muscle wasting (some of the weight loss will be from lean tissue as well as fat. sarcopenia is associated with insulin resistance in all individuals, regardless of body fatness. Exercising whilst losing weight can help prevent this I'll give a reference about this as I think it's important.
http://www.diabetesincontrol.com/compon ... e&Itemid=8
.I could probably think of more, well just one. Exercise makes you feel good It may be that body releases 'endorphins' which make you feel better or it maybe because there is a sense of achievement when you have done it.
Just start, but take it gently at first
'How to Easily Reap the Health Benefits of Physical Activity'
http://www.diabetesincontrol.com/index. ... 1&Itemid=8