Yep; a pw is just to let the server software know what you are allowed to see on a particular website.
So if you go to Amazon, and aren't logged in - you can't see your account info, previous orders etc. You'll be prompted to log in with your password. Separates the "members" of a website/forum - from guests or looky-loos. For instance, I'm on a forum that has multiple levels of subscription. The public area, is general homesteading info and the moderation rules are quite strict there. Behind the paywall, our language restrictions are lighter, topic moderation lighter, and in general is a more "within these basic limits - anything goes" forum. It's a civil place - even when there are disagreements, sometimes quite heated, because as a group we've been together quite a long time. That said, there are occasional "time outs" when some people refuse to regulate their online behavior. That's usually after a public chastisement or warning that everyone can see.
BTW - that particular model works well, but sometimes it's difficult for new people to find their way within that group. So new members are few and far between. That's one reason we all voted to move to the subscription model. People were concerned about their privacy; hate ads (even though we do have some merchants in that group); and want to be able to express ourselves freely without picking up the usual trolls, bots and other flotsam of the big public social websites.