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.
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.