I believe using photo references is okay as long as it is not directly copied from a photograph, especially one that is widely known and/or protected by a copyright law. After all, schools would like to see you use those references constructively; there's a difference between using it as a reference and straight up copying.
You'll probably have to look at each school's portfolio requirements to see if they demand anything specific (especially if the school has a hometest; the Parsons Challenge, RISD pencil test and the Cooper Union hometest are a few examples of this), but for the most part the portfolio should be 12-20 examples of your best work, preferably no earlier than your junior year of high school. You don't have to submit work that's specific to your major; schools would rather see what you're capable of. Include work that shows that you're versatile in a variety of media and styles.=, and that you have a thorough understanding of the elements and principles of design. Academic work is a plus, and should ideally represent a large section of the portfolio (such as figure drawings/paintings, still life, sculpture, photography and other studies). Try to steer clear of submitting any cartoon or anime/manga style work since art departments, for the most part, loathe seeing it in student portfolios each year. It is okay to submit stylistic illustration-type work but it is best to be kept at a minimum aside from academic work.
My portfolio had 20 pieces, and of that 20 about 13 of them were life studies. The rest was a mixture of drawing, painting, photography, one digital art piece and one linoleum print piece.
As for portfolio generally what a school wants to see is your willingness to learn and openness to teaching. Which means if you provide a portfolio full of one style and one medium you will come across as "well I already know what I want so why bother coming here" instead a range of work you've done for school/college, with some personal work too. Different media, different subject matter, perhaps a couple of more rough sketches...