Hi Katherine,
Honestly, until your site grows to thousands of users and visitors, the limits of SQL Server Express will not even be noticed.
mojoPortal stores pretty much everything except images and other BLOBs in the database. All content, pages, settings, users, passwords are in the database. One module that may cause some confusion is the Shared Files Module, the files you upload using that module are stored in the filesystem but all of the metadata (version history, description, downloads, etc...) for the files are stored in database.
HTH,
Joe D.