You can add a placeholder to your module and as the user selects options in the dropdown you would build the control in the back end.  After you build the control add it to the placeholder (and make sure it does a post back to refresh the page).  There's probably an AJAX way to bypass the post-back, but I'm just learning AJAX so don't know yet. 

As a basic example in ASP the following would be in the change event for your dropdown where the user chooses the control type:

Dim obj as New Label
obj.Text = "This is my label text"
objPlaceHolder.Controls.Add(obj)

This assumes you have a placeholder on the page called objPlaceHolder.  Depending on what you are doing you may opt to clear any controls from the placeholder before you add the new one.  You could use an if to determine which type of control to create and set the properties you need.

DNN already encrypts and stores user passwords in the database. There are many different ways to encrypt fields, just search on google and you'll see many many examples. Just remember, if you encrypt the fields (which you should do for passwords) you will need a decrypt function when people log in.