Is it normal that the RSS feed widget only updates every 12 hours or so?
Yes. Updating a feed too frequently places too great a strain on the host site and can have the same effect as a Denial of Service attack in extreme cases.
If that’s the case, why did I never experience the problem when the site was hosted on .mac instead of WordPress? I switched to GoDaddy in part because the .mac servers seemed slow (as well as being SEO unfriendly).
It’s not a matter of the feeds being generated. Just like with your iWeb site, the feeds are generated by WordPress almost instantly. Your RSS widget, however, only refreshes the feed that it is syndicating once every twelve hours. This to prevent unnecessary server load that may be caused by syndicating several feeds with very frequent updates.