yes you can add a password to your server to make it private. Clusters work by creating a cluster Id that's shared between two server. The only thing is of you're looking to cluster servers they cannot be password protected.
They are fully customizable yes. The only thing being if you're on xbox you cannot add mods to the server. These mods only work for PC. You can however make changes to what's called your ini file. Like having dinos spawn in your server that would generally not be on your map or change it so all engrams auto unlock.
Alright thanks for taking the time to help that covers what i need to know for now.