Short answer
A password protects your details from strangers and gives you control, but it adds a step for guests and some may forget or lose the password. You can always change or remove it later if it becomes a hassle.
The main advantage is privacy. Your website may include your home address, travel plans, gift list details and personal stories. A password stops anyone who finds the link from seeing that information. It also keeps the site feeling intimate, just for your invited guests.
The main drawback is friction. Guests have to remember the password, and some may struggle with it, especially older relatives. You will also need to share the password clearly, which takes a little extra effort in your invitations and reminders. If you have a large guest list, expect a few people to ask for the password again.
A password also gives you flexibility. You can share it widely or only with certain groups, and you can change it if you ever feel it has leaked. For most couples, the privacy benefits outweigh the small inconvenience. If you are worried, you can keep the password simple, like your venue name or the date, and repeat it in every communication.
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