That is the right section the passphrase is your key. The generate just turns that into several encrpyted keys. Should look like random numbers, letters etc.
I know what you mean Sand, But it isn't quite straight forward, don't get me wrong if you know what your doing it can take about 20 minutes to crack the encryption. But the likely hood of getting somebody doing that in a housing estate is pretty low. So i would always start with WEP, MAC filtering, disabled DHCP and montior the logs weekly to see if anything pops up. Then go further if needed just because I want the performance....overnet gets upsets otherwise.
I think you would be ok psycho, but do monitor your logs, no security is ever 100% safe. If you see gangs of people crowding outside your house....then you have a issue.