I recently had to decline two book requests, and I feel really bad about it.  I gave a detailed explanation why in the box provided, but I was wondering if the requester gets to see that?  I would have sent them a PM, but I would have had to accept the request to do so. 

Yes, the requestors get an email from PBS that includes the sender's explanation for the decline (if there is one.)

Yes, if you list a reason in the comment box the requester will see it.

And, PBS will never read it unless there is some need to investigate your account or someone reports you for sending a rude message.

(NOT meaning that you sent a rude message, just pointing out that the receiver not only receives the message, but is almost always the ONLY person who actually reads the message).

Oh yes.  I was once treated to a comment from someone who denied my RC in which they stated that I was "fussy" for requesting that they make sure that the ISBN of their book matched the one I had WLed.  I won't tell you what adjective I'd use to describe THAT person.  Bottom line: don't bother with detail.  A simple "does not meet requester's conditions" will suffice in most, if not all, cases.

They will see the reason.  But they do not see who turned them down.