Estimate how far you can drive on a tank.
Range is fuel times economy, but two adjustments make the answer usable. The gauge reading converts to gallons through the tank capacity — bearing in mind that fuel gauges are notoriously non-linear, typically reading generously in the top quarter and pessimistically at the bottom. The reserve is the gallon or two you decline to use, and planning to it rather than to dry is the whole point: running a tank to empty risks drawing sediment into the fuel pump and, on many modern cars, the in-tank pump relies on surrounding fuel for cooling. The range-to-dry figure is shown for reference, not as a plan.
Fuel Range
Fuel on board = tank capacity x gauge%; usable = on board - reserve; range to reserve = usable x mpg; range to dry = on board x mpg
Usually 30-50 miles, but it varies widely by model and it is not a figure to rely on. The light is a warning, not a range estimate, and the reserve is smaller than most people assume.
It can be. In-tank fuel pumps are cooled and lubricated by surrounding fuel, and habitually running very low increases the chance of drawing sediment or water from the tank bottom.