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Default locations:
$ORACLE_HOME/dbs/orapw$ORACLE_SID ---------------- Unix
%ORACLE_HOME%\database\PWD%ORACLE_SID%.ora ------- Windows

REMOTE_LOGIN_PASSWORDFILE= NONE/EXCLUSIVE/SHARED

orapwd:
$ orapwd file=password_file_name [password=the_password] [entries=n] [force=Y|N] [ignorecase=Y|N] [nosysdba=Y|N]

Examples
$ orapwd file=orapwSID password=sys_password force=y nosysdba=y
$ orapwd file=$ORACLE_HOME/dbs/orapw$ORACLE_SID password=secret

Conclusion:
1. Password file will be used for remote database login as admin user for administrator
2. enties what you mention while creating the password file is the maximum number of admins are allowed to login remotely as the same time.
3. You can grant the sysdba previlage to N-number of users irrespective of maximum entries mentioned in password file.

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