There is a way that doesn't need resorting to |default for each of your variables, but it requires a little change in one of the core files.
on line 340 of smarty/sysplugins/smarty_internal_data.php
replace
return null
by
return "#$variable#";
After this, all vars not defined int he conf file will appear as #name# (i.e. this is your #password#).
If for some reason you want a variable to be empty, just define it in the conf file as
variable = ""