I want to know how Storage setting in the cd_storage_conf.xml file works. My application gets deployed on JBoss.
Can I modify this file so that Tridion loads\store from any path (outside JBoss, classpath, anywhere on local or remote)?
The storage configuration indeed allows you to specify "storages", that may be database or file system based, then bind item types and subtypes to a specific storage.
For file-system based storages you can indeed specify any path you want, as long as the deployer has enough permissions to write to and delete from that location.
Once you set up your deployer to deploy to a given storage you have to make sure that the applications that read the content from there are configured in the same way, this time making sure they can read from that same location.
The examples in the cd_storage_conf comments should help you figure it out. Importantly, this file is only read at startup, so any changes you make require a restart of the JVM using it.