In previous historical periods, what was the use of a pseudonym, or a pen name, for a woman?

As Woolf points out, a pen name was meant to protect a woman's reputation. A woman writing for money was working, and therefore might be considered outside of the control of her family, living a sexually unchaste life. To safeguard themselves, women therefore wrote anonymously or under pen names, often masculine. For example, the Bronte sisters initially wrote under male pseudonyms.
Woolf is answering arguments proposed by men that the lack of women's achievement in producing great literature shows they are mentally inferior to men. She is at pains to show that it is the social and economic conditions of women's lives, not any inherent genetic inferiority, which makes it difficult for them to produce literature of the same quality or quantity as men. Women most often lack even something as basic as a room of their own in which to have the privacy to write.
As for the use of pen names, Woolf is mounting an argument that there are many more talented women writers than people suspect because women have been forced to write anonymously or using a male name. She asserts that most "anonymous" authors were probably women.

In this particular passage of her third lecture, Woolf is referring to the traditional importance of chastity in women's lives. Male society had endowed female chastity with an almost religious significance, and successive generations of women internalized the prevailing attitude, so much so that it took extraordinary courage to break free of it.
Yet even those women who led relatively independent lives for their time felt the need to hide behind male pseudonyms in order to veil their true identities. For centuries, women unthinkingly subscribed to the notion that women should not be talked about. So female authors such as George Sand and George Eliot effectively veiled themselves in their writing by using male pseudonyms. Anonymity was so deeply ingrained in the feminine personality that any woman with writing talent would be at odds with herself, leading to an inner strife the outward expression of which needed to be cloaked in a male identity for the sake of respectability.