As good the Notes Locking mechanism is, what I found out is it only locks Notes that are on "ICLOUD" and "ON MY IPHONE". It does not lock any other Notes that could be on your Yahoo, Google, Hotmail, Exchange etc. So one has to move those notes that require Password authentication to one of the above. So I had to move all Notes from non-apple accounts to ICLOUD to lock them. I think that is how it works - Sigh!!!!
The other missing feature is - one the Note is password locked and later opened - there is NO Auto Lock feature after a set time. Which means one has to lock the opened note again.