for line in $(cat file | grep -v '^ *#')
do
  echo "Line: $line"
done

grep -v '^ *#' < file | while IFS= read -r line
do
  echo "Line: $line"
done

or without a subshell (bash, zsh, ksh):

while IFS= read -r line
do
  echo "Line: $line"
done < <(grep -v '^ *#' < file)

For loops by default (subject to $IFS) read word by word. Additionally, glob expansion will occur.

Given this text file:

foo *
bar

The for loop will print:

Line: foo Line: aardwark.jpg Line: bullfrog.jpg ...

The while loop will print:

Line: foo * Line: bar

If you want to read word by word, you should still use a while read loop (e.g. with read -a to read words into an array).

Rare reasons for ignoring this message is if you don't care because your file only contains numbers and you're not interested in good practices, or if you've set $IFS appropriately and also disabled globbing.