What happens if someone hasn't logged into the site in a long time but they had their WL on auto request. Say they were offered a WL book and it got auto requested but they still never log back in again to mark the book receive. Does the auto request make their account active or do they have to actually log in to make it active?

They would have to log in to make it active.  If they haven't logged in for a certain amount of time, and the book is not marked received, the system will mark it received automatically.

Hopefully (and I know this is not always the case) their account would be suspended before too many of the auto WLs come up - but it's hard to tell. And some people put their shelf on hold but still have their WL on auto - so maybe they haven't logged in for a while, but when the e-mail about the WL book comes up they check in, and at least mark it "received."