What is that bar for? what does it mean? People? Things?

i think it means the green border

what? so why is mine yellow?

My best guess so far is the amount of items you have in there. Would make sense as well to limit the amount you can have in each one

This. I have maxed mine out at sanctuary hills and I cannot build anymore unless I delete other stuff. It's everything. Settlers, Walls, Plants, Turrets, anything that occupies the area.

will the green borders also get larger or are these set in stone? they seem to have different sizes depending on where the settlement is

Done a lot of building in different settlements and not seen any increase the border.

Border does not increase. the border size is pre-determined depending on which settlement it is and the size bar is overall for everything.

My red rocket mansion is approaching 6 stories tall on top of the gas station, I have no people there, but the size limit takes all spawnable items into account. Even people I assume.

Yep. My best guess is they did this to keep people from breaking their own games. If there was no limit you could theoretically make enough stuff that your console/computer wouldn't be able to handle the load properly which could cause all sorts of problems.

Hoping a modder will be able to let us increase the green border, and also place our own Workshops so we can make a settlement anywhere. Just for fun.

My computer should be able to take a fair bit more than what's going on right now, especially after Bethesda do all the usual patches for better performance and so on.

Its the number of settlers you have in your settlement, I noticed mine was half full even though I scrapped everything and had no objects built yet. Also you cannot change the green border. The yellow parts your seeing are just 2 corners of the border being in front of each other in your line of sight.

It's the number of objects. Some objects can't be removed remember. When you add more objects, the green bar goes up, remove them and bar goes down. Objects include the yellow trees/fallen logs as well as the green items.