Club 33 is a private club within Disneyland. You ring a buzzer next to the door, give your name to the host and they confirm your membership reservations and buzz you in. The Club covers most of the upper floor over New Orleans Square and is the only place in Disneyland where you can get alcohol. While this is not much of an issue anymore with the opening of Downtown Disney (DTD) and Disney's California Adventure (DCA), before those areas were built it was a big deal.
Yes it is a Victorian styled chair for you to sit on and yes, when you lift the seat there is a toilet bowl there. I really didn’t expect to feel like you were doing your business while sitting in your living room. I even made my girlfriend take a picture of me sitting on the chair (with the seat down). It takes a real friend to do that for you!