Rather than just playing a Flash Card game of "what does this mean?" and "what does that mean?" it would be better if you told us how you answered these interview questions (or how you will answer them).
Do you know what a bug is?
Do you know what the word density means?
What do you think bug density means?
That way, we can help you tune up your answers and engage in a discussion, rather than just playing the part of a dictionary.
Sure. But it has to be relative to something. For example, you might say "what is the bug density per build in the first 5 builds versus the next 5?" or "What is the bug density in the floggletoggle engine versus the rest of the product?"
This is really in the Software Reliability Management area. It is the number of bugs per (1000) thousand source lines of code.(KSLOC)
This is used to predict remaining faults by comparison with expected fault density.
The defect density measure can be used after design and code inspections.
If at a certain point the bug density was known and if there was going to be addition of some more source code then that could be used to predict the number of bugs that will be found in the new software after it had been coded.
If you were asked this question in an interview then certainly you were going for a lead or a manager position.