What does it mean to have too much clearance between the rods and the crankshaft?

The engine is worn and you will probably need a complete rebuild. In that condition, oil pressure drops and you will hear a low pitched knocking noise. The knocking is evidence that further damage is being done to the engine. It's like constantly hitting the rods with a hammer. Eventually one of the rods will fail and break apart, potentially sending pieces of rod throgh the side of the crankcase.