Basically, its a way to describe a nutty/dangerous or just generally stupid driver! Dads often say that their kids are 'hell on wheels'. Sometimes, it can be used as a compliment to a car - like if someone saw a lotus, they might say 'wow, I bet that goes like hell on wheels'. Hope that helps!
No, "on wheels" is much more figurative than that and is used here as an intensifier. The whole phrase is used to describe something that was hell (ie awful, dreadful) but the "on wheels" part makes it more so and has, of course, a humorous effect too. So, anything that's really bad can be said to be hell on wheels, if you want to emphasize how bad it was. I have also encountered "hell on toast" although not so commonly.