Thanks. Yes, it stores cookies on your browser to re-authenticate the user without them having to reenter their credentials each and every time they start a new session. Currently, this module does not use any database systems, however, you can absolutely do so if you wish. You can indeed store the hashed passwords on the DB and cross-check when the user attempts to login. Please feel free to make a pull request on the GitHub repo if and when you add such a feature.
Good luck!