Why is ethanol commonly used in perfumes and aftershaves?

Ethanol, like other alcohols, is a colourless liquid with a sweet distinctive smell. As a good solvent, it is effective for use in perfumes, etcetera, as it effectively dissolves the ingredients and blends them well. Moreover, it is volatile -- due to its tendency to evaporate quickly, it adds an effect on the perfume which helps spread its smell (or diffuse) at a faster rate.

Like most alcohols, ethanol also has a cooling effect on the skin, which is evidently soothing, hence an effective solvent for aftershaves.