As sections can be used in many places, these types will define the quicker configuration of a section sutiable to a right situation. By selecting the right type of section it is easier to configure the section with predefined layout and relevant sub sections. By selecting the type the section will be limited to right situation like dashboard, widgets and templates etc., By selecting the type as Standard section it can be used anywhere without any predefined layouts.
Specifically, the following items from that page (copied/pasted below) address your remaining questions. Please let us know if this is enough to go off of or if you need more guidance.
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This type uses layout templates for personalization of dashboards. A template is a section that has been marked as a dashboard template; it can have any name and be defined in any class.
You can configure any section to be used as a template or widget inside a personalized dashboard.
A portal can have multiple dashboards
Each dashboard in the portal can be personalized by the user
The contents of each slot in the dashboard can be personalized
This type uses widgets for personalization and to define the run time widget configuration options of a widget.
You can classify any section, so you are not restricted to maintaining all widgets in one class. A set of configurable options can be associated to a widget using a flow action and you can define default templates with pre-configured widgets.
Widget title – Enter a title for your dashboard widget.
Widget description – Enter a description of your widget to display.
Category – Select a category for your widget.
Widget icon – Click the Show Image Viewer icon to open the Image Catalog (a pop-up version of the Image Library landing page ) and select the image file. The recommended icon size is 50 x 50 px.
Flow action class – To define the flow action to be used as the Property panel UI for the widget, select a class value for the widget or click the Open icon to create a new flow action class.
Flow action name – Select a name or click the Open icon to create a new flow action name.
You can select an icon for the email template.
Template icon – Click the Show Image Viewer icon to open the Image Catalog (a pop-up version of the Image Library landing page ) and select the image file.