External power to Vdd is needed when running from single cell alkaline or NiMH batteries, energy harvesting applications and similar very low Vin. If you feed Vdd with a 3.5V external supply, the internal regulator is disabled and the converter will start with Vin as low as 0.95V and run down to 0.8V, or feed it 3V and let the internal regulator take over, powering Vdd from the output once running. That leaves you with the problem of getting 3V or 3.5V from 0.95V Vin, but as only a couple of mA will be needed, that's not too tricky.
As you've got 5V Vin, (or at least 4.4V USB Vbus), you don't need to bother with any of that.