This is the lowest point in the Western Hemisphere at 282' below sea level. It's created from the movements of various fault lines in the region, not from erosion as this is the middle of a desert (otherwise this would be a lake filled with water). Actually, Death Valley gets less than 2" of rain each year, and temperatures can exceed 120 F. This place was named "badwater" because a surveyor mapping the area couldn't get his mule to drink this water - he wrote on his map that the spring had "bad water". It's not bad, just very salty.
The boardwalk is to protect the rare "Badwater Snail", which only exists in a few springs at the edge of Death Valley's salt flats.
This information was taken from signs posted around the area.