the interwiki prefix is confusing as I see in one place it says to export from Wikipedia and then use 'en' (I have no idea if I'm supposed to include the quotes or not) as the interwiki
The interwiki prefix is, ultimately, just a label to identify the source wiki. If you already have an actual interwiki prefix set up on your wiki for the source wiki, use that; otherwise, just pick something single-word and reasonably descriptive. If you're following guidance that has quotes around a suggested name, ignore the quotes (I don't actually know what would happen if you tried to include them, but considering that, if you're importing, there's no way to change it afterwards, I wouldn't really recommend testing on a live wiki).
other places it saying to use the full uri (subing $1 for the last bit)
This is if you're actually adding an interwiki prefix to use in links. To do this you would need Extension:Interwiki installed on your wiki, and you'd go to Special:Interwiki on your wiki to actually add/manage prefixes. But you don't actually need to add a prefix like this to use the prefix during an import: if the prefix is actually there, imported usernames will link to the source wiki; otherwise they'll just be unlinked (AFAIK that's the only difference here).
And in the meantime regardless when I try to do the import I keep getting a gateway timeout even after I've bumped the memory and timeout limits to something well beyond what should be required for a 960Kb file.
Unfortunately imports do tend to time out when you're attempting to import larger files. I've had to resort to actually opening the XML file and deleting revisions that have already been imported on my wiki to get the size small enough to not time out (though I only recommend doing this if you're comfortable editing XML in general, since XML is not fault-tolerant, and I have no idea how careful the import process is in checking for correctness before adding stuff to the database).
There was nothing indicating that I needed those other 4 extensions and the scribunto configuration variables in order to get it to work
That's because, for the Cite extension itself, you don't need any of that other stuff. Open a random page on your wiki, without any references, and type or copy-paste the following code exactly, then preview:
This is some text.<ref>This is a reference.</ref>
<references />
It should work just fine. The reason you've needed to enable all the other stuff and copy so much from another wiki (I'm guessing Wikipedia, though you've never outright said which wiki) is because you originally copied one or more of Wikipedia's citation templates, which bring in a huge number of dependencies, as you've unfortunately found out first-hand. (All that being said, I will absolutely agree that the documentation here isn't as good as it could be. I've made improvements here myself, and all I can really suggest is that you also do so, if you have the time and interest.)