I have started to wonder if my right hand position and the way I hold my pick is completely wrong. Basically I rest my right arm on the top of the guitar. I heard that resting the right arm at all is bad but I tried not resting and it's probably the worst thing I could do. Every slide or movement of my left hand just wobbles the guitar and prevents my right hand from being accurate. I need a "counter balance" sort of thing like resting my arm against the top. I'm wondering if that's ok? I mean another issue I have is that my right shoulder gets VERY tired, I think it could be because my arm is not really "resting" but it is keeping my guitar in place. SO my right arm is actually doing more work than required..So idk what you guys think of this?

Also holding a pick started to seem wrong just recently cause it feels like I hold it too loosely and when I pick notes or strum my finger touches the string before the pick does. Does this have something to do with pick thickness? I need more advice on this.
dude you're supposed to rest your arm on top even in classical guitar, what you've heard about is the argument over anchoring which is needing to have a finger (usually the pinky) tensed down against the guitar.
as for picks get thicker ones
If your fingers are touching the strings when using a pick you are probably holding to close to the tip of the pick. If you're doing that because you feel like you're pick is going to slip out, try dunlop's max grip picks.

The right shoulder getting tired part is probably because your tensing it up when you play. Make sure it's relaxed before you start, and stays that way when you play. I had someone tell me a good way to position your shoulder is to think of yourself as wearing a heavy coat.

I really wouldn't recommend the pinky anchor, unless you only want to play electric guitar. If you switch to steel string acoustic or classical/nylon guitar that would turn into a hard-to-break habit. Stick with resting your right arm on, but maybe experiment with what part of forearm is resting on it.
the arm is supposed to be the counter balance but just barely. It sounds like your problem is simply tension though. Fretting the guitar shouldn't cause it to wobble. Just spend some time focusing on how hard your pushing down on the strings and how tense your arms are.