The hadîth that you mention can be found in Sunan Abî Dâwûd in the Book of Jihâd, the chapter on the intercession of the martyr. The number of the hadîth is 2522.
Al-Bayhaqî also mentions this hadîth in his Sunan (9/164; #18308).
In the hadîth, the Prophet (peace be upon him) says: “The martyr can intercede for seventy members of his family.” This hadîth has been classified as good by al-Suyûtî who records it in his hadîth compilation entitled al-Jâmi` al-Saghîr. It has been classified as authentic by al-Albânî.
Some scholars have mentioned this hadîth in their books to show the large number of people who a single Muslim might be able to intercede for. This is the context in which Ibn Khuzaymah mentions the hadîth in his book Kitâb al-Tawhîd.
Al-`Azîmabâdî, in his commentary on Sunan Abû Dâwûd entitled `Awn al-Ma`bûd, writes: “The members of his family include his forefathers, his progeny, his wives, and others.”
Al-Manâwî, in his book Fayd al-Qadîr, which is a commentary on Suyûtî’s aj-Jâmi` al-Saghîr, writes: “It is possible that the intent of mentioning the number seventy is simply to indicate a large number.
As for your question about the case of one who does not have a lot of relatives, I would say that few men fit this description, since a person's relatives include all of his Muslim ancestors who came before him and all of his Muslim descendants who come after him, whether or not he met them. As for the unbelievers of his family – and unbelievers in general – intercession is of no benefit for them, since Allah says: “The intercession of those who intercede does not avail them.” [Sûrah al-Mudaththir: 48]
And Allah knows best.