What is the purpose of a retracting cowl? I flew yesterday in a SWA Boeing 737-300(?) in the seat next to the engine. Right after touchdown, I noticed that part of the cowl retracted back significantly (a few feet or so it seemed), exposing the engine body. The cowl closed back when the speed dropped to taxi levels.

What is this cowl retraction for? Is it part of the aerobraking?
You have seen one type of the possible thrust reversal systems in action. In the following image is the bottom one.



Image source 

They deploy surfaces that deflect the bypass air and aid the brakes in slowing down the aircraft after touchdown.