A limited slip differential uses clutches internally to sense when one wheel is starting to slip, and it will momentarily lock the two wheels together so that they are both "driving". This has an advantage over the normal "open" differential, which simply allows the slipping wheel to continue slipping, and transfer all the power to the wheel that isn't slipping---essentially, "one wheel drive".
A true "locking differential" is one that literally is locked wheel to wheel, either by electronics, air or hydraulics, on demand. A true "locker" would not be very practical for dry street use, since when you go around turns, if neither wheel can slip, the gears will tend to bind and one wheel or the other will be dragged through the turn on dry roads.
Differential ratios are the final ratio between driveshaft revolution and wheel revolution. It's confusing, but generally a "lower" differential gear is actually the higher number. So a 3.55 is regarded as a "low", or power gear ratio----you'll accelerate faster off the line, and have more power, but your top speed and fuel economy will suffer.
A 3.55 would be good for towing heavy loads for instance. If you had a heavy trailer and only a 2. 73 economy differential, your clutch or automatic transmission would have to strain harder to get that weight moving from 0 mph. But with a 3.55, your rear wheels will spin faster and more easily---but by giving you that advantage, your engine will be revving higher at 75 mph with a 3.55 than with a 2.73--you'll burn more gas and you won't go as fast on the top end speed.
Neither extremes are good---too "high" a ratio, like a 2.25, would be a killer on a clutch or on trying to start up a big hill from a dead stop. A too "low" a ratio, like a 4.80, would only work for a drag racer who plans to be wound up tight in a quarter mile.