Density means both of the things you said, they're just different manifestations of essentially the same thing. In Terragen most things are generated by fractal algorithms that output range of values, generally interpreted as color, usually black and white. When used to control cloud density, black means 0 density, white means "full" density - which is to say up to the maximum density you specify in the Density control of the cloud settings. When used to control an object population, black will mean 0 object instances, and white will mean the maximum number of object instances, again as set in the population node's settings. So basically the density inputs blend between 0 and 1, with 1 being the maximum values you have set.
For clouds, "density" can mean "can't see through", and for populations, it can mean "how many things" - same input data, different results, but basically the same principles.
The "seed" of a fractal noise shader is just a random input number that generates a specific output of the math function that the fractal consists of. So if you input 1, you get a specific result from the fractal noise function. If you input 2, you get a different result. If you input 1 again with other settings being the same, you'll get the exact same result as using 1 previously. Adjacent numbers (1 and 2, 18 and 19) have no particular similarity to each other in output, it is essentially random (within the variations of the parameters you have set elsewhere in the node settings). So basically it's just a way to refer to different variations of the fractal noise function.
- Oshyan
