According to popular belief, Rangolis are drawn to welcome the Gods into the house.
I have not heard of the courtyard being designed with cow dung, but it is cleaned with cow dung. Early in the morning, women sweep the courtyard with cow dung, take a bath and then draw Rangoli.
A story I have heard (I have no reference) is that the Rangolis, usually designed using rice flour, attract sparrows and is food for them.
In South India, Rangolis are drawn every single day, though not as elaborate as the ones drawn during festivals. The swastika, Goddess Lakshmi and star designs are the most common. Women are hired solely to sweep the courtyard and draw Rangoli every day.
Reference: Seen it done every morning