Once all modules are converted (there are still a few missing, unfortunately the hard ones, but people are working on those), the PE world interact with the external system only through this "syscall" interface. The Unix world is required to be compiled for the external system's architecture, but the PE world can be whatever you want, provided that you do the appropriate things at the syscall interface.
For example, you can have 32 PE libraries and 64 bit Unix libraries, and at the syscall interface you switch the processor back and forth between 32 and 64. Or you can have x86 PE and ARM (or whatever) Unix, and you enable/disable an emulator at syscalls.
Depends which ARM :)
JIT-compiling emulators for other ARM processors otherwise need to be stuff the code full of memory fence instructions to be able to utilise multiple cores properly. Optimising those away can be hard.
WINE originally stood for "Windows Emulator", but for trademark reasons it was changed to "Wine Is Not An Emulator". That's giving you some mixed messages now, isn't it? [edit] I just checked Wikipedia, and that's not true -- the name wasn't changed due to a trademark problem, it was changed due to a genuine confusion about what the term "emulator" meant.