Generation is how many steps away the wolf is from parents with "unknown" parents. Your starters/progens, and wild wolves, are Generation 1, or G1 for short, because they have no lineage before them.
The pup of two G1s is a G2, and so on and so forth. If the parents are from unequal generations, maybe a G2 and G4, you go by the higher number, so the baby would be G5.
People value low Gen wolves because they're less likely to be related to other wolves, which makes it easier to pair them together. Nothing stinks more that having a beautiful wolf but every potential mate turns out to be a distant cousin.
Wild wolves can be found exploring in the campaign, they are auto-generated, and so finding a pretty one takes some luck. Like the wolves you start with, they have no known parents, but they aren't locked to your account. They're great for starting new projects and introducing fresh blood, as long as you can find a cute one. (For some contrast, I bought this gorgeous ww gal from my sibling, and for a long time this hot mess was the only ww I found on my own. Neither one has had any marking changes, that is how they were generated.)
Idk about lore and how people value that tbh.
Honestly a lot of it is subjective. How much are you willing to pay, and how much are you willing to accept?
