I have an old Airport Extreme that I want to password protect. I being told that Airport Utility 5.6 is needed to manage the base station. When I download it and try to install that utility I told that it is not compatible with OS X 10.7.4

I have an old Airport Extreme that I want to password protect. I being told that Airport Utility 5.6 is needed to manage the base station. When I download it and try to install that utility I told that it is not compatible with OS X 10.7.4

The odds are that you downloaded AirPort Utility 5.6.1.....which will only work with Leopard and Snow Leopard Macs.
Since your post indicates that you are using Lion 10.7.4, you need the correct utility for Lion. The link is below:
AirPort Utility 5.6 for Mac OS X Lion

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