Heh, heh... Jordan, I told you it may be tricky to learn string making
The board you have is to make a string the exact length you want. Extra length for making the eye on each end is already figured into the design. If you want a 58" string, set the center peg at 58.
Ragi's page on string making is a good one. He uses a regular jig in his illustrations, the one you have is a compact design. That just means you wind around the nails and peg a little more. Follow the ABC's with the string and you'll be fine.
To answer your actual questions...
Wax helps hold the strands together *while you're making the string.* After that it will be held together by the splice that you've twisted the ends into and the twist that the center section will have.
String length: for longbows, set the peg about 3" shorter than bow length; recurves, about 4". Those measurements aren't hard and fast, they can vary by the bow. Minor length adjustments can be made by twisting the center of the string tighter (shorter) or untwisting (longer). But there are limits to adjustment that way. Sometimes you'll just ahve to undo it and try again or even make a whole new string.
If all else fails consider getting Chad's DVD, Doing The Twist. It'll give you that visual example that will make everything click.
I'm here for you in any way I can help.
Guy