Is there a way to add or track friends? I am obviously new. Maybe I have to play with groups and make a custom group?
Other than scrolling the map, clicking on each Wazer, and looking for those that you know - no. Waze is not designed to track people. It’s a commuter targeted GPS Navigation application with a focus on getting you to your location the fastest way considering traffic.
On the app (I have the iphone version), it says that you can get 200 bonus points for adding your first friend on waze. But it seems there is no way to actually add friends, as far as I know. Maybe someday? 
In the quick support and the wiki.
Waze has no internal friend system. It uses facebook friends for this purpose.
This bonus only occurs if you have connected your Waze account to your Facebook account, and 5 of your Facebook friends join Waze (with connected accounts).
To view the rank and point totals of your Facebook friends:
Go to “My Dashboard”, click on “View Waze scoreboard”, and then click on the “Friends” tab with the Facebook logo next to it.
Here you will be able to see your Facebook friends with their rank and point totals. Unfortunately, your friends will show up as their Waze username as opposed to their actual Facebook name.
Hope this info helps!
Further complication is that there is US and World servers and the friends are added accordingly (or rather messy). So I don’t see US facebook friends in World scoreboard, although World friends appear in US server scoreboard.
There is a ‘manage friends’ section under the “Friends & Foes” tab in the User Control Panel. You can add and delete friends there.
Is this just for the forums section posts or does this have anything to do with the points received by adding 5 friends?
only for the forum sections.
Link your fb account to waze and then go here http://www.waze.com/forum/viewtopic.php?f=12&t=14970