It represents the target value so how far you want the robot to drive. Set it to the desired distance (in your case measured in motor degrees since that is what you use).
PID simply takes in sensor values and translates them to motor power. If you add tracking wheels in the same general orientation, then it is as simple as using those values instead (you will have to adjust the PID constants).
You have to add turnMotorPower to one of the motors and subtract it from the other. Also make sure you apply it correctly as doing it backwards would multiply any small turn. (You can test this by setting lateralMotorPower to zero, running you program, and seeing how it responds when you try to turn it.)
Also if you want to make you PID more precises, I would recommend applying proper time units to the timed variables, I and D. Here is a great example of how to do that from another post I made…
Another slight note, probably useful for a judges interview, the P in PID stand for Proportional, not Potential.