It's moreless a model number. It dont really have any particular meaning they were just picked to be the numbers. The 350 describes the smallblock powered car(289-302) and the 500 would be the FE big block cars(427-428) There are many other points that go along with the Shelby Mustang names but that's kind of a quick rundown.
I remember watching something on Speedvision and the 500 came from the engine (429) 500 sounded better than 429 so thats how it got the 500. Or something to that degree