1 - Is the app able to view password protected albums. I read a comment from 2013 that this wasn't possible.
Yes, albums that are hosted at jalbum.net and are password protected can be viewed. (jAlbum can't password protect albums hosted at other providers, so if they are the app do't know which protection mechanism is used.)
2 - Is it possible to comment from the app. It didn't look that way but I perhaps missed something.
No. The current way of commenting an album is via the commenting widget, but the widgets are not supported by the app.
However, as an album creator you can add captions to your photos, but I assume that's not what you mean.
3 - Can I set up non-members to view specific albums/projects of mine? The usage scenario here is to set up older relatives that are iPad users with the access to (password protected) projects/albums where they can view/comment on family photos. It would be much easier from them to access the albums this way than using a browser.
In the app you can view a list of albums you like, but that requires that you register at jalbum.net. But that is free as long as you don't want to create albums of your own. So register a free account and "Like" the albums your older relatives should have quick access to, and log in to that account in the app. The list is at Activity->Liked.