"Hide Excel on start" is a special feature to beautify the end user interface and allows to make Excel grid invisible.
This interface should be coded by VBA. 
"Hide Excel on start" does not affect on protection rate of compiled EXE application.

Please download the following two examples to find out how the "Hide Excel on start" feature works.

http://www.doneex.com/downloads/samplevba_he.exe

SampleVBA_he.exe file was compiled with "Hide Excel" option "ON"

http://www.doneex.com/downloads/samplevba.exe

SampleVBA.exe file was compiled with "Hide Excel" option "OFF" 

Original SampleVBA.xls file you may find in the DoneEx XCell Compiler installation folder.

If you take a look at the example you will see that it contains the custom form. In case of using 'Hide Excel'  this form will be used instead of the original Excel interface.