Application-layer firewalls on the other hand have the capability of acting as a proxy in either or both directions and thus have the capability of protecting the sources from the users and the users from the sources.
Thus, application-layer firewalls mediate the traffic between the source and the destination and this provides a better view of the traffic that is passing through the firewall.
Application-layer firewalls can also be used to publish the server on the LAN to make it internet-facing and provide the optimum level of security that it deserves. Users on the internet will be visiting the published port on the firewall where the traffic will be scanned and then passed on to the server.
Application-layer firewalls can be made more effective by building more stringent security functions onto them and by giving them the ability to scan deeper into the packets that they are traveling across. This gives the administrators far more visibility of the traffic that is passing across the firewall and hence refines the rules based on any new requirements.
See also What is Session Layer Firewall?