SteelSandwich

You are right in your conclusion that this plays a more prominent role in PvP than it does in PvE.
You are also correct in your understanding of what having the wind means.
In order to properly explain what having the wind means in an engagement, one has to understand that it gives certain advantages to each side. However, in general, it is considered more of an advantage to the player upwind.
If players are presumably using longs in pvp as its the dominant weapon isn't their range the same (I'm aware pen is not)? If so when they turn to shoot, as long as I can meet their turn can't we exchange fire the same regardless of the wind? Assuming we can pen each other of course.
Say that you are both sailing beam reach (In your example, you are both sailing West) and you are downwind of your opponent. If you are both stationary you will have 0% heel. However, when you are both sailing, you will have a higher heel %. This in effect means that you can shoot at your opponent with greater ease, since your ship is tilting; therefore your guns are angled up.
Your opponent’s ship does the same. Unlike your guns, his are angled downward. He might not be able to get his guns to reach your ship. His shorts would simply fall short.
if I'm in front, they have to sail towards me to engage which means they can only shoot when we are in effective range of each other, they cannot force me to a specific side for fear of losing distance, doesn't that mean that if I'm in front I dictate which side I fight on?
This is partly an advantage for you. You can try to kite your opponent. Kiting basically means shoot and run until your opponent is no longer able to catch you. This can be done to great effect, especially with a few good broadsides of chain.
Your opponent however can dictate the style of the engagement. If he is more than happy to stay at range and you are equipped for boarding, you are going to have a hard time. Or alternatively, he can be equipped for boarding and just trying to rush a boarding combat with you.
You can’t decide this part. When fighting in larger groups of players (25v25 in RvR) it comes down to timing your attack right, usually aimed to cut a part of the enemy fleet off.
Regarding your third point, I am not sure to what you are trying to say here, so I’ll leave that one be for now.
Is having the wind only useful if you are the faster ship? I know the consensus is that speed is king in PVP but if its that important and a player is that good at staying in that pocket why have much Armour at all? And why isn't everyone just attacking and kiting from that sector of the compass?
Can a slower ship do anything against a faster ship that can sit back their effectively?
It not just useful when you are in a faster ship, but it makes life a lot easier when you are faster. Simply put, if you are slower than an opponent, you can just immobilize you further and start to run circles around you. Eventually they will start to camp your stern and that is something you want to avoid.
If you are slower it doesn’t mean that you are by default beaten, that usually boils down to knowing when to call it quits and leave an enemy be. Knowing your sailing profiles does certainly help in disengaging. Disengaging upwind is fairly easy to do and is an advantage of having the wind.
 
Im fairly sure i missed a few points, but this should get you started.