Where does NetworkManager store WiFi passwords on Ubuntu 15.10?

If you choose to only enable your user to use that wifi network, then the wifi password is stored in the gnome keyring of your current user.

If you let every one use that wifi connection, the password is stored in the file you mentionned.

You can also manually change where that password is stored in network manager settings for that wifi network, security tab, click the hdd+green arrow icon in password field and make your choice.

The password files are saved in this folder :
(in case the password is stored for all users)

/etc/NetworkManager/system-connections  

Execute this command to show all information :

sudo cat /etc/NetworkManager/system-connections/YOUR-SSID  

When the password is stored for only one user, it is saved in gnome-keyring.

You could consider using the nmcli command to update whatever NetworkManager does under the hood. To show the current password for SSID "example":

nmcli --show-secrets connection show id example | fgrep 802-1x.password

To update the password for the SSID "example" use:

(IFS='' read -s -r -p '802.1X password '; nmcli connection modify id example 802-1x.password "$REPLY")

Most of that command is to prevent the new password being displayed on the terminal, remaining in an environment variable, or being in the shell history.