What Is the Difference...

...between "Friend" and "Allied" units?

You find them in the "Targets Allowed" section, for abilities and other Object Editor stuff.

Honestly, this is probably the biggest thing that stumps me when working with the WE.

It probably includes neutral players or one way alliances. Try those out.

arnt "friend" units your own units, and allied units units from an allied player and/or faction?

In other words:
"Friend" units are under your direct control
"Allied" units are friendly units under the control of another player or CPU.

...i think.

Yup Ertw got it.
Theres also a Self, tick box to allow self-cast.

Wait but doesn't "Allied" also include Friend units, or simply put, units under your own control?