Question: Where specifically on the arm/hand should rapid picking speed come from?

Answer: 
It depends completely on the technique that you are trying to gain speed on. 

* If you want fast, palm muted power chords (like metal guitar), then it's in the wrist.
* If you want fast open chords (like Pinball Wizard), then it's more in your wrist / forearm (I guess you might consider forearm to be bicep).
* Fast single notes (like Dick Dale), is either wrist or a twisting of your forearm.
* Fast picking for lead lines could be a million different things, including alternate picking, finger technique, sweep picking, etc.

The one thing that took me a long time to realize is that at the end of the day, you'll be faster if you are relaxed. It may not feel like that to begin with, but tensing up never really helps.
The pick type makes a great difference to me - if I'm chugging I'll use a fairly thick pick, but for speed I'll go for a 0.4 or 0.45 mm pick, and as new as possible...if it is worn you have to move it further to get the point of the pick past the string to return back across it.