What's wrong with my script?

the WaitForSeconds is a special instruction used only in co-routine functions, google for more info. it won't work in Update function. what you need is a simple timer implementation.

 #pragma strict
  
  var enemy : Transform;
  private var spawnArea : Vector2;
 
 public var spawnTime : float = 3f;
 private var timer : float = 0f;
  
  function Update () {
  
  if (timer > spawnTime) {
  
      Instantiate (enemy, spawnArea, Quaternion.identity);
      
      timer = 0f;
 
 //another note here:
 //if you don't add 'f' at the end of the numbers, unity will take them as integers
 //and return a random integer between 0, 3.
 //this will return random float:
 
      spawnTime = Random.Range(0f, 3f);
      }
  
 timer += Time.deltaTime;
  }