In this game what exactly is the squadron referring too? I am also confused about the squadron points? I bring this up because when I hear the squadron I think of fighter planes. So exactly how many fighters in this game would make a squadron or is the word being taken wrong? As for Squadron points generally how are they earned?

It seems to me that you're way over-analysing this. It's your ships that you bring to a match, with whatever agreed upon squad point total. It's also used as part of some of the pilot names on the various ship cards. Unless someone is writing their own campaign, there's no "squadron points" to be earned. It's not experience points.

From the Rules Reference Guide, page 18:

SQUAD BUILDING
Each player builds a squad by choosing ships and
upgrades whose total squad point cost does not
exceed the total agreed upon by the players during
the “Gather Forces” step of setup. The squad point
cost of each ship and upgrade is printed in the lowerright
corner of each card. The recommended squad
point total for a standard dogfight is 100 points.

Squad(ron) points aren't earned, they're spent. Each game has a predetermined squad point limit, most commonly 100, which is the maximum number of points each player can spend building their squad(ron). (The squad point cost of each card is found in the lower right corner.)

Of course the word also has an in-universe meaning, and to answer that question: a squadron is usually twelve ships of the same type. That's not really relevant to the tabletop game, though. For one thing, you can't fit twelve ships in 100 points. Our games usually take place at the Wing or Flight level.

Thank you guys I appreciate that explanation it clears things up