Regarding “Physical path (not URL) to the rules file”- What is a rules file? What is it for and what does it do?
When you enable the email validation on registration feature, an email will be sent to the user with a validation link. The user needs to click on the link to activate his or her account. After the user clicks on the link, a page will show up with the rules file, which are the conditions for participating on the board (whatever you want them to agree to). The user needs to check a box indicating that he or she accepts the rules, and only then can the account be activated. If you do not want the email validation/activation, then this will not come into play (default).