When a recipe calls for "tomato sauce" what does that actually mean?

I would say 95% of the time, they mean the product in the tomato section explicitly labeled as "tomato sauce"....its a very basic tomato puree. I'd imagine you can probably read the recipe and determine for yourself which would be "better"...since most recipes aren't as good as they could be. Most of the time with recipes like stews or soups, you can modify them to your own tastes without diminishing the quality.

Most recipes that want plain strained tomato (w/of garlic herbs or oil) will say so, in one-way or another.
They may be called: passage, puree, fresh chopped.
If a recipe asks for tomato sauce, yes use packaged or home-made sauce, to your taste or what sounds good with the rest of the recipe.

It depends on the recipe. Some recipes might refer to another recipe that specifically for home-made tomato sauce.

Some recipes are pointing you to a standard commercially available product such as this:

https://www.google.com/shopping/product/4896573735710662086?q=tomato+sauce&biw=1286&bih=1076&bav=on.2,or.r_cp.&tch=1&ech=1&psi=1xxcWYODF6KV0gKumKvAAQ.1499208920816.5&sa=X&ved=0ahUKEwjv67K93PDUAhXk5lQKHXvXDT4Q8wII-wIwAA

If you walk down the canned food aisle of your local grocery or supermarket, no doubt you will find similar products labeled "tomato sauce."

Again, it depends on the recipe and the recipe's author. If you are not sure, ask the recipe author for clarification.

Good luck.