nzmarty,
All this slipping terminology! I perceive the general convention seems to be that a side slip is where you head the runway track to counter a cross wind, another name for a wing down down approach. A forward slip is where you fly more side on to increase drag and descent rates. For some reason it makes more sense to me the other way around but that is another story. I have noticed that some people to describe the other way around!! They are aerodynamically the same thing and seem to both fall under the name of side slip when not being specific about the application.
the inner wing shielded by the fuselage, the part of the wing that creates the most lift (inner, where the flap is) is receiving poor flow, buffeted airflow, and only the outer wing is generating 'clean' lift.
The text book generic high wing in a side slip theory is that windward wing (the one you call the outer), because of the high wing config will pool higher pressure air under the wing, whereas the leeward (the innerwing in your description) wing's underside will be shielded by by the fuselage so will be lower pressure and so will generate more lift. The result is that when side/forward slipping the windward wing will drop, making the aircraft unstable. Low wing are the opposite and so tend to want to recover from a side slip. That is the ATPL text's description, but like lots in the ATPL it is theoretical and the designers don't seem to let these problems find their way into production aircraft (as far as I can tell anyway!)