But I think I’m understanding a bit! I need to literally create a file named “/etc/radicale/config”.

Yes, you will need to create that config file, on one of those paths so you then continue with any of the configuration steps on the documentation, you can do that Addresses step first.

A second file for the users is needed as well, that I would guess the best location would be /etc/radicale/users

For the Authentication part, you will need to install the apache2-utils package with sudo apt-get install apache2-utils to use the htpasswd command to add users

So the command to add users would be htpasswd -5 -c /etc/radicale/users user1 and instead of user1, your username.

And what you need to add to the config file for it to read your user file would be:

[auth]
type = htpasswd
htpasswd_filename = /etc/radicale/users
htpasswd_encryption = autodetect

Replacing the path with the one where you created your users file.