Translation:Who is it?
(方 can be a respectful way of saying either person or direction.)
So you can see that these words are different readings of the same kanji, except for the commonly used あなた. The 貴 kanji in あなた is an honorific title (i.e. lord) rather than a (this/that/over there) location identifier.
I KNEW IT! I made the same observation as boo913. Mind breaking down the uses for these fine words? ...And why "anata" is considered impolite? Is it, perhaps, because it's overly-polite and creates an awkward situation because it's not being used properly? MY MIND HUNGERS.
It's not rude, it's just overly-friendly to not use someone's name if you know their name already. It's like "I know you enough to skip your name".
A wife would call their husband あなた and this sounds very similar to how you would say "darling" in English. You can also see that the kanji used for the word denotes this meaning、貴方 literally means "person that I hold in high esteem" or a "precious person to me". They are way better pronouns than あなた、the thing is that when they are teaching people Japanese あなた is the most convenient one because is very neutral in general, that's the impression I get at least.
Yep. I think it's because it's abrupt. Japanese culture is pretty indirect, and Japanese people are always considering the other person. (That is, looking out for how they should proceed by reading cues from the people around them.) So, being indirect allows them to kind of "test the water" in order to gain this information, and then act accordingly. Hence, there's not a lot of directness or speaking one's mind without regard for the social environment. Socially speaking, they're pretty cautious. It has its good and bad points, of course, just like speaking one's mind without regard for others does.
I personally think that there needs to be a balance. You shouldn't bottle everything up and stifle yourself, but you should be considerate of other people, too. Everyone's emotional and mental health is important. Not only yours (using the general "you" here, by the way, not talking about you specifically, Hanabi001) and not excluding yours.