Its mostly been covered already, but there are a couple of things I would like to add.
If you're reading everything above and then ask "I want the most realistic racing game there is, what should I buy" then you will face a bit of a problem. Pretty much every sim racing enthusiast will tell you that their favourite racing game is the most realistic and that all the others are arcade, rabble, rabble, rabble, etc. The truth is that, at least with the four most popular ones (Assetto Corsa, iRacing, Project cars and rFactor) they are all pretty much identical in terms of realism and you should just stick with the one you like the feel of most. They are also all much better with a wheel than a controller, but the ease of use of each of those games with a controller has nothing to do with the realism of the game, and more to do with the assists and controller setup options that are built into the game.
Also, while I agree that a good arcade racer is more fun than a good sim racer, the sim racer is still a lot of fun. However, for me the sim racers more than make up that slight deficiency with the level of satisfaction you get from a really hard fought, clean fight for a position, whether that position is 1st or 21st, something I rarely get from arcade racers