What should I enter as "Database file" for a SQLite database?
This configuration dialog is for SQLite-type databases only, it might be that your installation only has activated the PHP modules for this type of databases (for MySQL databases, you need pdo-sql, see here: https://www.drupal.org/node/2219779).

If you wish to use a SQLite database (which should work fine for testing purposes), you can either indicate a location for your SQLite database file, or leave the default, which should work fine. The Drupal installer will create the SQLite database for you in that location; you don't need to create it separately.