Does this work with the Restrict Login add-on?
Yes. However, if an IP isn't in the list of allowed IP addresses, it won't login automatically. Thus, the Restrict Login add-on takes precedence.

Is it possible to add an IP range?
Yes, you can add CIDR ranges.

What's the Description field for?
Just to add a note. It's espcially useful if you have a lot of IP addresses.

I want to know more about IP spoofing and the risks, do you have some more info?
Here are some interesting links you may want to check out: