@Vandal85 im disappointed, your post makes it sound like GNU/Linux is just generally crap at everything.
I agree with the first couple of answers.
1 There probably isnt a 'best' distro, most are quite similar.
Ubuntu is generally widely used, openSUSE is also very good if you want something that will work without needing to know much right away,
I use Arch mainly. Its very much built it they way you want your OS to be. But in reality its not very difficult to install, if your technically minded even somewhat youll be able to install it with little problem (and theres already #teklinux on EFnet where a lot of us hang out for help).
2 I personally would say yes there are better distros for gaming.
The reason I say this is because a few distros (like Ach) are rolling release and have up to date software, this means it generally gets driver updates and opengl updates faster than anyone else. Its especially good if you use open drivers (intel or AMDs radeon drivers) as they improve with every release and they release often.
Thats not to say you cant get the latest drivers on more 'stable' ditros, but distros like Arch ship the latest drivers by default whereas Ubuntu requires adding repos etc.
3 Steam and Steam OS are two different things.
Though to be fair Steam OS is basically Debian with steam. Steam on Linux is great. I have no problems with it. On Arch and a few non debian/ubuntu distros when its first installed you sometimes have to delete a number of libraries it ships with because it conflicts with system libraries, but its a simple fix. the actual steam software works great.
Its Not however worth wiping your Windows drive yet. If you have a number of windows only games they wont work on GNU/Linux.
However! you can check winedb which is a compatibility layer that lets you play a number of windows games in GNU/Linux. A lot of games have very good support, this includes a lot of steam games.
4 Compatibility in what way?
For games. If it has a Linux versions, its supported. Some games dont work as well under the open drivers either becuase the graphics chip isnt powerful enough (intel) or the drivers dont fully support everything yet (radeon). (not that that said, the radeon drivers for me work very well with games like xcom, eu iv, civ, KSP, cities ckylines, and many more
For hardware. Support is very good. most general hardware (modern and old) has full support and in many cases is supported better than windows because its supported right out of the kernel (not need for driver installs).
'Gaming hardware' is a bit of a different story, generally because there's no standard and gaming hardware tends to be burdened by stupid amounts of software drivers and required programs support for them isnt as good. An example of this is if you have a killer NIC, because its a non standard hardware that was made with software to replace windows TCP stack it doesn't work well in Linux, this is improving with new releases of the kernel but its not up to par with something like Intel NICs.
Remember. GNU/Linux, whichever distro you try is not Windows. How long have you been using windows for? Now remember that you have not used GNU/Linux for anything like that amount of time. It will take time to learn just like Windows did, its different from Windows, it does things differently.
The command line is very useful. People think its an old archaic thing, but its very powerful and modern. It can do a lot for you, it can do almost anything really.
Play around with different desktop environments. Remember that (for example) ubuntu gnome is literally just plain old ubuntu with gnome installed (apt-get install gnome), so you dont need to reinstall a distro to try a different desktop environment as much as people seam to love shipping a stupid amount of distro variants for every single desktop environment out there.