Holding the pick is all personal preference, however I hold mine with my thumb and halfway between the side and print of myindex finger.

As for getting fast PM's down, its just all practice. Just like learning anything difficult, start slow and build up. You don't have to use a mentronome, they can be boring sometimes, just make sure you stay at a consistent speed and don't change unless your sticking with that speed. I learned fast PM by playing along with As I Lay Dying's Shadows Are Security cd. A lot of it is drop c open mutting, so you don't need tabs to play along, not to mention, after a while, you start to figure out a lot of parts on your own. I also recommened playing along with some Slayer and Lamb of God, all great ways to get going since all have slow and fast songs with great rhythm. Note, all 3 of those bands use different tunings.

Your right in letting your wrist do the picking, thats how its suppose to be done, letting your elbow change strings. Your aching after a while becuase your tireing muscles that you normal don't use, and after a while, they'll beef up and you build stanima. One last thing, don't down pick everything, a lot of fast mutting is done with alternate picking, even when its across three strings. It might seem really hard at first, the pick digging to far down and catching the strings too much, but as I said before, start slow and build up your speed. Stick with it and you won't regret it.