What it means is that when you start with a brand new install of Discourse you should not have an api key and when you go to the API tab it should look like this:
So you will need to click that key icon to create a system wide api key. I’ll work on improving the docs about how to create a system key and how to make user api keys.
That key most definitely should work, most likely something else was the issue and you might need to provide more info with how you made the api request so that we can help you troubleshoot. Also please check if the content-type was set to form-data.
You will need to hit the /notifications.json endpoint and pass in the user you want notifications for in the api_username field.