Midnightangel, I am quite shocked that you were called for a medical before you'd even sent the forms back. You'd think even the DWP would follow their own rules!
The website www.benefitsandwork.co.uk
has helped a lot of people on here - they have detailed information on ESA and guides that will help you prepare a good appeal should you wish to do so.
The WRAG, from what I understand, means that they understand you can't work now but that you might be able to work in the future. You will have to attend 'work-focused' interviews at the Jobcentre which I think are aimed at finding out what kind of work you could do. I think it involves some kind of compulsory activities in return for your benefit, such as training or pain management courses.
There have been some scary stories out there about workfare on the WRAG (I don't know whether there has been a U-turn on this or not) but they can't force you to take a job.
If you want to appeal and get put in the Support Group then the B&W website (link above) has good guides.