During sign-up I noticed there’s a checkbox for that. I’m guessing it’s a default option on all Lemmies.

Yeah it is, there's no configuration to disable that (yet) 😖

Will NSFW, and what particular kinds if any, will be allowed on this Lemmy?

If by "nsfw" you mean pornographic material then no, i don't think that's a good idea, there are other platforms for that...