How the passwords will work in my level sets/How many levels should I start off with when creating my first level pack?

[Flareon350]

Also, how many levels should I start off with when creating a levelpack?

That is entirely your choice. There's no rule stating a level pack has to have a certain amount of levels Some people choose to have 149 levels in a level pack, in respect to the original game. Others prefer a smaller but even amount of levels (like 40 or 100).

Welcome to CCZone, by the way!