Need some help understanding camera orientation

You can simply set the coordinate-system variable to y-up-right in your Config.prc file to switch Panda to an Y-up coordinate system. The default setting is z-up-right.

If you were to want the Z axis to point forward from the camera, instead of backwards, what you actually want is a left-handed coordinate system, where as the default is right-handed. To achieve this, you would set the above setting to y-up-left and rotate the camera 180° around the Y axis.