You can enable or disable customer registration from Setup → Settings → Customers → Allow clients to register.
If customer registration is disabled, you will be able to add only customers from the admin area.
The dropdown for the language is an indicator of the language the contact will use while browsing the customers' area.
Keep in mind that the language for the contact is applicable only for the customers' area. This means any emails or PDF documents will still be sent in the default language selected in the customer/company profile.