[notanzaiiswear]

Those random words are the master seed. Usually you don't enter the master seed to use your wallet. Your wallet encrypts the master seed and unlocks it with a password of your choosing. I suppose they are talking about the password to the wallet, not the Bitcoin keys.

[ArtTimeInvestor]

So you have to remember two passwords?

The master seed and the wallet password?

How is the wallet password created?

[notanzaiiswear]

No you don't have to remember the master seed. You should write it down and hide it somewhere, though. You need it if you lose access to your wallet. (It's a bit like a backup of the encryption keys for your hard disk, if you have enabled disk encryption).

The wallet password depends on the wallet of course. I guess you often create it yourself or it may even be optional.

I wouldn't recommend that approach for storing large amounts.