The high level path entry maps to a team directory. So "http://rhea.sealinc.org/test/index.html" is mapped to "/teams/test/index.html"
The FileInfo, AuthConfig, Limit, and Indexes overrides are allowed in your .htaccess file. If you want to limit access to your site during development you can setup the .htpasswd file, but you should remove that limitation during the evaluation period.
The web server is running under the profile NOBODY, so any files that you want to be served must be readable by that profile.