What is meant by 'proteolytic activation' of a virus?

Viruses all have some mechanism to enter cells' lipid membranes, and these need to be prevented from activating prematurely. Often this means the virus is in an inert state while it is assembled and trafficked out of the host cell, then activated by some chemical signal such as the low pH of inner endosomes. So "activation" is usually going to refer to a chemical change that removes the barriers to cell entry.

For example; in flaviviruses such as Zika or Dengue, the E glycoprotein that handles most of the host entry functions is assembled while bound to prM protein. Once virions are assembled with E in an inert arrangement, prM is proteolytically cleaved. When the new host cell absorbs the virion into an endosome and lowers the pH to digest it, the E glycoproteins rearrange into spikes that can penetrate the endosomal membrane and induce fusion with the viral membrane. If prM isn't cleaved, the virus can't infect cells. Here's a recent paper that discusses this process, with high resolution structures. For these viruses there are two rounds of activation, and only the first one is proteolytic.