The settings, are, as many things on Sublime Text 3, simple
JSON files. Though, the extension of the file isn't
.sublime-settings. As you probably understood, the settings changes how the packages affects Sublime Text 3. It is important to be aware of as much settings as possible to optimize your workflow.
The system for most of the packages is the following: a default one, and a user one which overwrites the default one.
To understand the priority of the settings (which is strongly recommend), have a look at the unofficial-but-awesome documentation: http://docs.sublimetext.info/en/latest/customization/settings.html#the-settings-hierarchy