Preferred form

Preferred form

rather than, say, object files or preprocessor output

I think in practice it's usually a bit stronger than that; the 'preferred form' is the actual source, excluding machine generated files. That excludes preprocessor output, as you say, but also plain C code generated from other things, and, I think it's at least arguable, a big single patch that's been generated from something else.

The idea being that you can modify and rebuild the program.

Again, I think it's a bit stronger than that - you could, after all, rebuild something from pre-processor output too, it would just be hard work. It seems to me that it's generally taken to mean that you should have access to the same source as the person distributing the code - if they've written machine code directly with a hex editor, that's the source, if they've generated it from assember, then that's the source, and if it came from a big block of C, then that's the source. And if it came from a VCS, a big set of patches, and scripts to assemble the whole lot, then that is the source.