Hello
To answer your questions -
- Why do you want to turn off password requirement? I would imagine you want to password protect your current admin user, right? If so, make sure you don't do that for your current user.
- If the new local user is NOT admin type, they will not be able to see content in your profile. But if you give them admin right, they can. You can set up this local user without a password, and they can just leave password field blank to enter it.