The function parameter to the setPassword function is readable by everyone because it is transmitted as plain text
The password string is transmitted as clear text, so everybody can see the parameter with which the setPassword function was called.
The password is not safe when it is transmitted as clear text. Everybody is able to retrieve it from the blockchain.
none
Passwords should always be stored as hashes, using a salt for extra security. The blockchain is transparent so everybody will be able to retrieve what values are stored in it. So use a safe way to create a hash from your password, and don't send the plain-text password to the contract.
Private functions and state variables are only visible for the contract they are defined in and not in derived contracts. In this case private doesn't mean secret/confidential
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