Luke is a foil for Valentine. While Valentine might be Clary's biological father, Luke is her real father, in a relationship that mirrors that of Jace and Maryse. Except Luke actually supports Clary, unlike Maryse who is a little more shady with her alleged love of Jace.
One big thing that happens in this book is that Luke confesses he's in love with Clary's comatose mother. This enables Clary to give a hypocritical speech about how he should tell her, because someone should always say how s/he feels about someone else. (If only Clary would try that herself.) Maybe Mom'll regain consciousness and feel the same about Luke in Book Three.