Oh it's pretty simple, just few lines actually. First line is:
SETLEVEL 1000 0 1 81
Basically it sets the NPC to have the same level as I do (1000 = 100%), second stat is redundant but has to be set (level offset value but the first one already deals with it), 1 is the lowest level and 81 is highest level. Can use max 100 for highest level but since player cannot get to level 100 in vanilla game and 81 is max, I used that. Can of course set any other level value, since most NPC's are usually between levels 2 to 15, so can set last two to 15 81. Or heck, 100 100 if one wants

Second line is:
ADDITEM 10AA19 1
That's a standard silver sword. I used to give to them actually the SkyForge Steel sword before, but with the Dawnguard the vampires were added and they're tricky buggers, so I figured that a silver sword may be of use to the poor denizens of Skyrim. I haven't actually checked it myself but if Bethesda did it right, Dawnguard vampires do fall under the undead category and thus should be affected. No point to give any more powerful sword as it would make things maybe too easy, but no point to give any weaker either as it wouldn't help much then. Third line is:
ADDITEM 39BE5 25
This is the ultimate healing potion. Sure, at first it may seem that "wow, such a powerful potion and even 25 of those at a time!" but then again it's not. At low level it doesn't matter because any potion pretty much heals them fully up (in most cases), so this potion behaves no differently. At higher levels opponents get and use healing spells, buffing spells, drain attacks (and they use them a lot) and so on and most NPC's don't get any of those so these sort of equal the field. Also, they can still be killed, they can be staggered, knocked down, etc which may not leave them enough time to use it. And finally, I only buff them once but do not "refill" them, so these potions have to last them a "life time"

If they use them up, oh well, bad luck. And final line is:
SETAV CONFIDENCE 3
All NPC's have a confidence level, it determines how cowardly or foolhardy they are. Value usually ranges from 0 to 5, where 0 means "chicken" and 5 means "crazy fool". I set it to 2 or 3, a middle point. What this does is make the NPC still defend itself or it's friends or other friendlies around, but if things get too bad they will still run or take cover.
All in all this file does not affect the game much since these NPC's are all in their standard locations and thus they don't make anything easier for you, while it gives to them a chance to survive, especially since the player char and monsters do level up, but NPC's were forgotten so to say. Those poor farmers, villagers, khajiit caravan runners.. But as you see, it doesn't add any ability to the NPC what it already doesn't have. Every NPC has a specific skill set assigned to them and these raise up as the NPC level raises, but abilities remain the same. So no poor farm yokel will suddenly become crazy powerful warlord or arch mage, he'll still be a farm yokel but a yokel who "grew up" a bit and can defend his family, his farm and his cows against an assailant. Mostly. Sure, if someone wants they can just launch the CK and add a different skill set to some NPC and indeed turn that farm yokel into a powerhouse but that's everyone's personal choice