(Doc) Explain creation of knife.rb for noobies

I'm approaching these docs from the standpoint of a basic developer who's maybe once used Chef, or maybe never. From that standpoint, it's not clear from the readme where knife.rb is supposed to be or what its total contents should be.

> Ensure a knife.rb file is configured on your local machine:
>
> node_name “solo”
> data_bag_path "/data_bags"

Unclear:
1. Where's knife.rb supposed to go? /path/to/this/repo on localhost, or under ~/.chef? Maybe /path/to/this/repo/cookbooks?
2. Are the two lines above ALL that we need in knife.rb, or is more needed beyond just this? If so, what?
3. Is "cookbook_path" above able to handle relative paths, or does it need to be absolute? In other words, can I use "./cookbooks", or should it be "/path/to/this/repo/cookbooks"?
4. What's node_name "solo" mean? What if we're working with an environment that doesn't utilize a solo role machine in EY Classic? In other words, what's "solo" here - the machine role on which this is to be run, or...what?