The Navigation Pane Security area is for the G3 users and access rights settings.
For protection of the source look under File, Protection...
It's done nicely right there, passwords and recovery methods.
Then you can leave "enable upload" turned on but that will not circumvent password protection of the database. You can upload it, but without the password you cannot open it.
The whole chapter on Protection in the Crimson Manual is shorter than this post. It is not clear to me if applying protection to the database will protect the cd3 file on your PC, but I would expect so.