Looking for a clear explanation...

[Imp]

Here's where we are: Range affects penetration (duh) and the round type affects what you are shooting at (again, duh), Penetration and Kill work together in relation to armor.

You are stuck on KILL, again it has zero nothing absolutly zip to do with firing at armour it does not factor into the equation.
Kill is only used vs soft targets while penetration is only used vs hard targets.

And warhead is important for figuring casualties on soft targets based on its size, type, and terrain of target

Its the least important as I think Cross & myself said forget it there is no need to go into that much detail.

Now Part 2, is the association of armor and penetration a direct one - meaning if my target has a frontal armor of 8 and I shoot it with a sabot round with penetration of 10 (factoring in the range) - the end result with a hit should be a penetration. 10 being bigger than 8. Obviously there are other factors that probably go into the forumla (slope, "wobbling", bad luck, etc) - but is that a good rule of thumb?

Thats pretty much it in a nutshell all you have to worry about for firing at hard targets, luck randomness whatever you want to call it will play a part but you know the likely outcome.
As your example there is only a diffrence of 2 damage rather than destroyed is a possibility.