Signature settings are to be changed in your profile settings as well (in the top navigation bar) - just switch to the "Signature" tab there. The signature space is limited to 500 characters, this cannot be increased. You can use bbCode and HTML as well in your sig, if it has been allowed by the administrators in the admin panel (General >> Forum >> Messages & Email >> Allow HTML / BBCode).
The second option can be found in your personal profile settings. Go to "Profile >> Preferences" and enable the option "Always attach my signature". Your signature should now be attached to all posts you make, if you actually have content in it.