Where are you supposed to sit to wait to make a left hand turn?

No, I’m saying if I hang way back at the orange rectangle to make my turn, and a spot in traffic opens, even though I have ROW I’m making a huge sweeping turn and they guy and the stop sign has no chance to make it across. He also has no idea if I’m making a left or a u-turn.
If I wait in the gray rectangle, he knows where I want to go, I know where he wants to go, and when a gap opens we can take off at the same time passing to eachother’s left.

The correct position of your car when turning is not shown on the OP’s diagram. One is supposed to pull straight into the intersection, positioned to turn the wheel and proceed when the opportunity presents itself. Rowrrbazzle and Barbitu8 have it correct. That way, you are as far into your intended path as you can get without presenting a potential hazzard to the rest of the traffic.

(What should be taught to every new driver - and drilled in - is that when you’re out there on the roads, you’re a member of a community and you have responsibility to all others to make their lives easier and safer, too.)

Okay, maybe the angles of the red & blue cars in my drawing were a bit extreme but you would agree that they should be in the middle of the intersection, blue to the left and red to the right? Not in the horrible position of where the green cars are?

Yes, but only because to stay at the stopping line after the light changes keeps the guy behind you from advancing and maybe making his turn, too. I see nothing inherently wrong in sitting there where you had stopped for the red light (green cars). But moving into the intersection also gives you, and the oncoming drivers, a bit of an advantage if you’re turning while there is still some traffic coming, in that you clear the intersection a bit faster.

The red and blue cars in your diagram, while exaggerated are in the correct position.

Your drawing doesn’t have any orange or gray rectangles that you referred to.

Take your ROW so as to not confuse others.