Will Word really see these as tracked changes?

Yes. Insertions, deletions, moves and formatting changes are written as the w:ins, w:del, w:moveFrom, w:moveTo and w:rPrChange elements Word itself uses, with an author and a timestamp on each. Word's Accept and Reject buttons act on them normally.

Can I stop somebody turning tracking off?

There is a Lock tracking option with a PIN, and it is a deterrent rather than security: anyone who can open the file in another editor can lift it. It is stated as a deterrent here for the same reason Word's version is one — the document is in the reader's hands.

Does the draft get uploaded for the comparison?

Nothing is uploaded at any point, including the compare and combine features, which run in a Web Worker on your own machine. That matters more for review than for most jobs: the documents people redline are contracts, appraisals and papers under embargo.

What if I forgot to turn tracking on?

Compare the two files instead. Give Compare Documents the original and your edited copy and it produces a third document in which every difference is a tracked change, word by word, which is the same result reached from the other direction.

Track Changes Without an Account

Turn on track changes in a browser, edit somebody's .docx, and send it back so Word shows your revisions as revisions. No sign-in and no upload of the draft.