This passage gives a succint outline of the movement from oneness to multiplicity that is expanded upon in the rest of the Sepher Yetzirah. The phrase "ten sefirot of nothingness" emphasizes the illusory nature of physical reality and the tzimtzum. The word "b'limah" in Hebrew may be translated more literally as "with no-thingness". Hence, physical reality and the sefirot have no substance apart from God. All that is knowable is rooted in the Unknowable. Nevertheless, even if structure is an illusion, it is still a structure that must be followed (Torah and mitzvot/commandments) in order to transcend it. Simply because the world may ultimately be an illusion does not mean that it is wise to replace its form with chaos.
The twenty-two letters of the Hebrew aleph-bet are representative of the introduction of structure into the world. They are akin to fundamental particles from which the rest of the universe is created. Three of these letters are seen as mother letters, and they correspond to the One's illusory separation into three so that diversity can occur. Seven letters in Hebrew have both a hard and a soft sound, and these letters represent qualities for which a positive progression can occur from one end of a scale to another. The remaining twelve Hebrew letters have but a single sound, and on the Tree of Life they correspond to a simpler movement in consciousness where attention shifts from one thing to another.
On a personal level, we might say that the Oneness that we start with creates multiplicity by splitting into three (a Knower, a Known, and the Act of Knowing). Next, we engage in activities (the seven doubles) that help us evolve in a variety of ways such as the movement from ignorance to wisdom or from lack of control to self-discipline. However, our lives are not always so focused, and thus, we also engage in less focused, mental "channel flipping" by shifting our awareness randomly from one thing to another (the twelve elementals). Notice also that every language has fundamental sounds or letters that are the building blocks for that language, and hence, for the creation of the ideas that characterize an individual's unique perceptual universe. Consequently, in a very real sense, the universe is created by combining letters.