I'm not sure how the priority pass works with hotels I'm a bit confused, if someone would be so kind to explain how the passes come into play with hotels thanks in advance
There's a check box next to both types of rooms for guests with priority passes. Basically it means if you check it, then the guests will only be able to check in to that specific type of room with priority passes.
So this gives you a few different options. You can make it so luxury suites require priority passes for your guests (possibly to motivate your guests to buy a priority pass and still charge them for a luxury room).
You can also make your whole hotel exclusive to priority pass owners with suites still being the expensive option, select both boxes (Risk vs reward I guess, it may turn off your guests from going to the hotel in exchange for more money on priority passes).
Also, if you wanted to for whatever reason you can make the normal rooms exclusive to priority pass owners. (Probably to encourage guests to pay for the suites as an alternative if they don't want priority passes.)