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

Answer: 
i would say it's all in the flick of the wrist

the goal is that you don't really want to be straining your muscles much if at all. it's really about twitching the wrist quickly without flexing or constricting muscle much, to not tire your arm. you don't need strength for this. just speed.
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.