The last time I was under my hood, I noticed that the black blanket type of thing was coming down in a few spots, so I pulled it off entirely. I didn't like it hanging near the belt. Is this going to harm anyting. What purpose does this piece serve? Any help would be appreciated!

 

It's there to help insulate the heat from the engine compartment from damaging the paint on the hood mostly.

 

It's called a silencer pad. I've heard of several guys saying that they took theirs off then had the clear coat start peeling on the hood from it getting to hot. My buddy that used to work at the Dodge dealer also told me if I took mine off to expect to have the paint peel. I decided to spend the $90-100 or whatever it was for a new one from the dealer. Can't remember what I paid but I don't think it was much over $100 if it was any over that. I just replaced it in my truck not too long ago. It's super easy to change.

 

took mine off, it was doing the same thing. no paint peeling issues at all after about 7K miles.
I hope I didn't just jinx myself.

 

Take it off, but replace it immediately. Mine cost $70 from Dodge.

 

Yup that sounds about right. I couldn't remember how much mine was. I got all the clips needed too which were a rip off but I needed them so just got them from the dealer too when I did mine. Mine was falling down. I had zip tied it in several places and it kept ripping more so I just gave in and bought a new one from the dealer.

 

I was able to salvage my clips with a small screwdriver. I found where the little arm was, and picked them out one by one. If you pull them out (like I did with the first one), usually they will just break off. I figured they were like the door panel posts.

 

Read this post, its a couple years old. Silver Dodge stated his never came with one, and many others have taken theirs off without any side effects to the paint.
VWandDodge states its in case of fire, and others say its for noise. I did notice a slight increase in noise, but it was minimal.

and RM Indy hasn't had his in since 1998. I am sure his paint would have boiled off a long time ago.

Take it off and you should be fine, read the post yourself.

https://dodgeforum.com/forum/2nd-gen-ram-tech/66588-under-hood-insulation-needs-replacing.html