This help page provides some tips for testing various aspects of your setup:
http://www.e-junkie.com/ej/help.test.htm
If your product is priced at 0.00 or uses "Let buyer edit price", then it will not be possible to edit the item quantity in the cart; this is a failsafe to prevent an unscrupulous buyer cleaning out your inventory at a free or lowball price. Clicking Add to Cart multiple times for the same item will not increment the order quantity, which prevents buyer complaints from unintentional over-ordering; buyers can only change their order quantity by entering a preferred quantity figure in the cart (assuming the product is configured with "Let buyer edit quantity").
The Send Generated Codes feature presumes either that you already have a keygen script that you have been given to use or a custom keygen script developed for your needs, or that your software download file is pre-locked with the proprietary SoftwarePassport/Armadillo solution developed by Silicon Realms, in which latter case we already have their Armadillo keygen script installed for you to use (via our o_plug.php integration handler). The order data we POST to your keygen script would include quantity information for each item, so it would be up to your script to handle that however you require (e.g., by outputting multiple keys back to us, or by outputting a single key that your custom system recognizes as valid for X number of uses, etc.)
If none of the cases above apply to you, you should probably use our Send Stored Codes feature instead, perhaps using Random.org/strings/ to generate a list of codes to store and issue:
http://www.e-junkie.com/ej/help.selling-codes.htm