In fact, the literal meaning is I pray you. You're welcome is the idiomatic meaning. Something like, I pray you not to thank me.

It is a polite form that you give in return to a polite form that you receive. For example: - a person apologizes to you because he passes before you in a shop door. She says " excusez moi" and you answer " je vous en prie" . That means you notice that the person is polite and that doesn't mind you. - a waiter brings you the dish you have ordered. You say "merci", the waiter answer "je vous en prie". That means that the waiter notice you are polite and he thanks you expressing the respect for him. You can often replace " je vous en prie" with "de rien", that is less formal, more familiar.

Oh thank you!!

PS "J'ai noticé" doesn't exist. You can say "j'ai noté" (I noted) or, better, "j'ai remarqué" (I noticed).