The limited ATAR is for students 20/21 years old and over. Instead of completing 10 units, you only need to complete 5. The way they calculate the ATAR is around the same way, just that the work load is halved.
Keep in mind though, doing the 5 units ONLY gets you a limited ATAR and NO Higher School Certificate. However, if you complete 10 units &you are over 20/21 years old, you may be eligible for a limited ATAR, and ATAR & a higher school certificate.
Yes, you need to do the subjects at TAFE.