Referal question?

I have noticed in my referrals that I have no name level 1s that have been just sitting. What does this mean?

It means that the accounts have been created, but never logged into before. They haven't gone past the screen where you create your username.
Hope that helps.

If you're creating other accounts yourself, you might not want to make too many otherwise I'm pretty sure Riot can find out about it and possibly disable/ban the accounts. You get rewards when your friends refer you and get to a certain level.