It kinda depends, different people make them different things. Sometimes they are just shipping pawns, sometimes they're better developed and more fleshed out. Sometimes they can be seen as alternate parts of their creator's personality, sometimes (especially recently) they're more like OCs, which is totally fine too. They can pretty much be whatever you want them to be.

Building off of what HAB said: It's really up to your personal choice. If you want to have the most developed, ungeneric AE out there, then go for it! No one is telling you that you HAVE to have a well developed AE, but in my own experience, they are more fun that way. It's also fun to do ships, but that's not the sole purpose of AEs. Not mine, anyway. Or at least I hope not.

When I first joined, I interpreted AEs as personifications of less obvious personality traits of their CBers, like a way to express things you don't think of as belonging entirely to you or to the person you want to be seen as. This is why I based mine off of somewhat exaggerated aspects of myself; it's why Nymph is a shapeshifter and Sea Glass is collecting things. They're very deeply rooted in me.

As I've spent more time here, though, I began to realize that not everyone sees it the same way. Some CBers have AEs who are characters, not related to themselves at all. Most don't see AEs as other faces of a person. They create their AEs, construct them the way you assemble a composite sculpture, building and taking away as they wish. I didn't do that. I pulled together all the echoes of my younger self and a few strands of who I am now and put a name to them, the name Nymph. But not all of those echoes and strands have stayed the same; some have fallen, more have come, and all of them are growing or changing. I don't think of it as under my control. Sea Glass is a little different; xe's like putting together a jigsaw puzzle, all the pieces fitting together, but there are no edge pieces and no picture you're supposed to get. And the pieces are starting to grow.

Sorry, you probably didn't need all that. You can make your AEs however you want. They don't have to be developed or related to a part of you, but you can start with yourself if you need ideas, or just if you want to. The recommended number is two or three, mostly because it's easier to keep track of a small number and there's three main ways to style fonts (bold, italics, and bold italics) so you can tell who's talking. And if you don't want to make one, you don't have to. There are CBers without AEs. Do whatever you like. 

I gave Cloud a really elaborate backstory that surfaced during a thing of Mei-Xue’s where one of her AEs was kidnapped. She’s based off a part of me, but not like Viola’s AEs- Cloud is just based off the part of me that wants to just sit and draw all day. I’m actually slightly introverted, though very outgoing. This is because introverts draw their energy from being by themself and quiet- it’s actually a brain thing, like different things trigger the part of your brain that makes you feel happy and energized. So I feel kind of exhausted after school (which is crazy) and parties and things, but at the same time I love that kind of thing. So Cloud is based off of the introvert part of me.

Pzun is a different story. He was a CAPTCHA, then a CAPTCHAE, then I made them into just an AE. He’s got a lot of typical CAPTCHA personality traits, and a vibe of his own that relates to loving animals. I think they’re pretty well developed, but they’re not based off me. They’re pretty much an OC.

Hey Blue, whatcha writing? Hang on...

that’s a lot of words.

There can’t be that much. She’s just writing about us.... oh god. That is a lot.

Let’s just... go somewhere else.

Good idea. Back away slowly.