BCV could be tough because that's during Food & Wine. I know studios were out at the 7 month window for my dates (a couple of the days were available), but I managed a 1BR.
In general, I'm not sure anyone KNOWS how the waitlist works exactly, but you ask to be put on the waitlist for the particular resort and room type (at resorts with multiple room classes, you might be able to say "any"), so long as you have points available to cover it if it comes though. You could have multiple waitlists covering the same dates - I believe if ANY of the matches, the rest are canceled automatically. I'm not sure you can prioritize them.
If, at a later time a room becomes available that match your waitlist, then your existing reservation if you have one is canceled and and a new one is made. You should receive a confirmation in the mail with a new reservation number.
Of course, there are factors involved in determining who gets their waitlists filled - first come, first serve and all that.
If it gets to be a certain time before the hoped-for reservation date (30 days IIRC), then the waitlist is automatically canceled unless you call and ask for it to be specifically extended. However, this was before they went to an automatic waitlist confirmation system when if there was a match they would call you and you had a day to decide if you wanted to confirm the reservation or not. Within the 30 days it was automatic only. I'm not sure if that's changed.
Now, some people have found that they can call up MS, and discover that "Hey, that room is available today!" and manage to book the room then and there. I've speculated that the automatic fulfillment system is rather limited and only runs once a night matching rooms to waitlists, but during the day a room could become available and then be snatched up by someone calling in.