As a new player... so far, I'm hating this game.

[Sagittarian]

Another thing about those quest where you have to say something to a npc along with having them selected the game is very pedantic when it comes to it, for instance one of the quests have you say With the Wind. However if you do not capitalize the w in with and the w in wind and you type with the wind it will not acknoweldge the prompt

Blame localization for that. Japanese does not have capitalization so the recognition code would not have taken that into account. You could argue that this is poor planning from the developers.
It would be looking for an exact text match with a key value. The localization teams then had to decide on a single text string to use as the match. The capitalization was probably decided to match with German, which is going to capitalize all nouns anyway.

Edit: I thought about how they are probably doing the text recognition. They probably have to change all the text into unicode before they compare it with the key value. Capital and lowercase letters have different unicode values. So to check something like "wItH tHe WiNd" while ignoring all capitalization would mean all combinations of lowercase and uppercase have to be considered. That would require up to 2^11=2048 comparisons. And you know *someone* would try to break it by entering as long a string as they could. Rather than poor planning it was probably deemed too resource intensive.