Does the N7 level in multiplayer do anything; like unlocking features or effecting placements for games, or is it just an indicator of how much multiplayer the person have played?
It has no effect on any aspect other than how other players may treat you. I don't know if they use truskill in ME3 (I don't think they do, but I was unable to find any indication one way or the other), but that would be how they would match you if they did. Otherwise it is likely just random. I have been in matches with all low levels (like me) and in matches with all really high levels (150+).
It is a combination of the levels of your multiplayer characters & has no effect on your game.
I think it actually stands for something. When my level was below 300 the "rest skill points" item appeared as a gold item. Once I surpassed the lvl 300 it became silver. I think the higher the level the higher the odds to get better weapons and items such as black widows or other N7 guns