What would an "orbiting astronomical observatory" do in 1964?

Did such things actually exist then? Gathering useful info and transmitting it to the ground? Or could it be a spy satellite?

Apparently, they were astronomical observatories. Not for the visible spectrum, but rather UV and X-ray. There were 4 launched, but only 2 were successful.

Yes, they did. Check out this Wikipedia list.

The publicized ones which orbited by the early '60s were primarily studying the upper atmosphere, the Earth’s magnetic field, cosmic radiation, etc. And, by then there were also weather satellites.