Hilary Stoupa:Have you tried the same steps w/ a different workflow form? Just to try to rule out whether it is the specific form that is an issue? Can you attach a screenshot of the pop up you get about the new fields that asks if you want to refresh the data source?
An obvious test that I did not do due to lack of experience way back when. Testing on a different form worked as expected! Back when I first attempted this I believe I had added fields through the SP site and not through the workflow in SP Designer. I went in and removed all of the fields that weren't associated to a content type from both the task list and the workflow form list. I saved everything and republished. This is where I got a clue, an error appeared saying the schema was invalid!
Thankfully I saved a backup of the .xsn. I made sure no custom fields were added and published it. Publish went successful. I then closed InfoPath and published the entire workflow again. This time no errors and no *(update needed)!!! I then re-opened the workflow task form from within SP Designer and it opened successfully this time, no schema error. I closed the unmodified task form.
Now at this point I think everything was sync'd up properly and I was back to square one. All I did now (and this is where I believe the problem started since I did not do this correctly the first time) was open the workflow, open the workflow task, and add a field to the workflow task fields on the top right in SP Designer. I saved the workflow task. Opening the task LIST, I saw the new fields were added automatically. Not sure if there is a link behind the scenes but I wouldn't be surprised.
After closing the workflow task FINALLY things were looking good, the *(update required) appeared next to my form. I clicked it and the popup appeared, "One or more fields in the workflow form have changed. InfoPath will now update the set of available fields..."
And viola! I see my new fields!!!
TL;DR - Basically by improperly adding fields through the SharePoint site via web browser and not through the Workflow Task using SharePoint designer I broke the schema for that form causing it to be out of sync and unable to update. After cleaning up all the test fields I added this way, everything started working again!
Thanks so much Hiliary for all your help. You got me pointed in the right direction eventually leading to the solution! Couldn't have done it without you.