Basically you have two resolutions.

One is how many pixels across and tall each of your regions is on your screen.
Two is the warcraft resolution within that window.

Your monitor will show as many regions as you have set, and they will be as many pixels across as you have set each region to be.
So you monitor displays each region at the exact size you have picked.

Warcraft takes each region, and assumes it is your full screen.
So it fills up the region to the scale warcraft has been set to.
If warcraft is set to 800x600, warcraft thinks each region is your full screen and scales your interface for that amount of spacing between things.

Another way to look at it: imagine you had every region taking up your whole screen.
If warcraft was set to 800x600, then that is your full screen resolution.
If you had a smaller monitor, you can still have 800x600 resolution, but things will be smaller on the smaller screen.
Your regions are essentially multiple smaller monitors all displayed on your actual monitor.
So each region is 800x600 resolution within their smaller screens.