What problem does an MIL light indicate?

MIL on VW and Audi's is Multifunction Indicator Light, or check engine soon, and can come on from a multitude of causes.....you are describing alternator drag, your alternator has not failed but will soon

when you are noticing the loss of power and rough running is the alternator light on as well?.if so it could be due to low system voltage,until the alternator spins fast enough to start charging ,you need to get the car checked by somebody familiar with VW .if you run the car too long with low system voltage,you run the risk of damage to some expensive components,all of the cars control units are designed to operate at certain voltages too low or too high will damage them. The CEL is the cars way of telling you that there is a system that is functioning out of it's parameters,and that it has not passed a self check,dozens of components and systems are connected with the CEL. A steady yellow indicates that a system or component is not functioning as designed,a flashing CEL means you should not drive the car,that the problem has the potential to damage the catalyst,and needs to be addressed as soon as possible.Hope this helps.