Signature settings are to be changed in your profile settings as well (in the top navigation bar) - just switch to the "Signature" tab there. The signature space is limited to 500 characters, this cannot be increased. You can use bbCode and HTML as well in your sig, if it has been allowed by the administrators.
My Signature is not displayed, what should I do?
option can be found in your personal profile settings. Go to "Profile >> Preferences" and enable the option "Always attach my signature". Your signature should now be attached to all posts you make, if you actually have content in it.
Note: On some forum versions, it's possible that you still won't see your signatures on posts you have already made, although you have activated all necessary options. There is no other way to change this than to edit those posts and mark the box "attach my signature to this post" and save.