Now my specific question is, what are all the privileges or powers I will get if I get good reputation score? What is the supreme power or privilege that I will get in SE and for what score?
Each individual site will have a
/privileges page. This page can be found by clicking on the "Privileges" link, which appears when you hover over your name (next to your reputation) at the top of the page.
For Stack Overflow it's http://www.stackoverflow.com/privileges for example. There you'll find a list of links on the right hand side which contain the details of what privileges you get at which reputation level.
Similarly what are the penalties I will get for bad reputation like many down votes in my posts or having a good score of closed questions? What is the worst penalty that I will get and for what score or for what reason?
Downvotes result in a lower reputation. But far less severely so than the reputation gained by a single upvote. In general, your reputation will keep increasing unless you get your participation really wrong.
However, should you have a fair number of downvoted or closed posts, then you might be automatically post-banned. This can happen for both your questions and answer. When exactly this will happen and what the exact algorithm for this automatic ban is, is a closely guarded secret. But the previous link does detail what might cause such a ban and what you can do to lift it. Better avoid the ban altogether though.
And that's basically it. Unless your behaviour is particularly abusive or fraudulent, which might see you receive a timed suspension. But those are different matters altogether and as a generally well behaved users, you should never bump into those.