They should tell you how many points you have to "spend" and provide you with a "menu" of your choices that you can "spend" those points on, listing how many points is required for each perk.
To be certain that this goes smoothly I HIGHLY recommend turning the bookings over to an experienced cruise travel agent!!! It won't cost you any more, and the agent can organize the group for you.
Depending on what categories everyone is booked in it may not be all that likely to have the entire group placed in cabins near to each other, though some will bound be to in close proximity.
As I suggested, let an agent handle it for you. They'll make sure the dining assignments are cross referenced so you're all seated in proximity, as well as helping organize the cabins, and the perks from using the points.