Both uses of the past form are possible. Some grammarians speak of the past form as "remote", because it "removes" the verb to a distance which may be either temporal or social.
Hi, Maria, I'm calling because I wanted to take you out for dinner.
Here you use the past form to make want less demanding. The remoteness is social.
Sorry I couldn't track you down last night. I wanted to take you out to dinner.
Here the primary sense is clearly temporal remoteness. You could, however, work in a degree of social remoteness by also employing the progressive construction, which in this case would have no implication of imperfectivity - it would just be a further distancing device.
Sorry I couldn't track you down last night. I was wanting to take you out to dinner.
Note that this last construction could also be used in the first example:
Hi, Maria, I'm calling because I was wanting to take you out for dinner.
In this particular instance, however, the progressive construction would probably not be used because it clashes with the progressive calling in the main clause.
- Grammarians give this the Latin name horror aequi, "the
widespread (and presumably universal) tendency to avoid the use of
formally (near-)identical and (near-)adjacent grammatical elements or
structures" (Rohdenburg).
You'd be more likely to use it in a context without a prior progressive:
Are you by any chance free tonight? I was wanting to take you out for dinner.
To express the "see-what-you're-missing" sense in English you would employ a construction with a stronger sense of intention. The past would be necessary in this case, rather than optional, because you would be speaking of a prior intention which no longer holds:
I was going to take you out for dinner, but I've changed my mind.
Your answer is perfectly fine. Why do you want to change it?
If you are concerned about politeness, I suggest you give a reason why you do not want this person to use your computer. For example,
"I'd rather you didn't, if you don't mind. The last person who used my computer spilled coffee on the keyboard!"
Or,
"I'd rather you didn't, if you don't mind. It's just a personal policy of mine."
If you change the wording, you could include the words I'm sorry,
"I'm sorry, but no. I hope you don't mind."
The hope you don't mind expands the thought of your being sorry. In effect, you are saying that you do not want to offend this person, you are sorry if you do, but your answer is nevertheless no.
Your tone of voice is important. Your facial expression is important, too. When you are telling a person "No," your voice should be pleasant and conciliatory, and your face should "wear" a partial smile.
Another possibility:
"I do not want to offend you, but I'd rather you didn't."
Or,
"Please don't take this in the wrong way, but I'd rather you didn't. It's just a personal policy of mine."
This response assumes the person could be offended, but it tells him or her that that is not your intention. In other words, you would say no to anybody and everybody, not just him or her. Or,
"I'd prefer you didn't, if you don't mind."
Or,
"Please understand, but I'd prefer you didn't."
Or,
"I hope you understand, but I'd rather you didn't."
Or,
"No offense, but I'd rather you didn't."
Here, the phrase "No offense" is shorthand for "I do not mean to offend you" or "My intention is not to offend you."
Best Answer
I agree with your friend that if you use please in addition to another "softening" phrase in your request that it could be perceived as somewhat obsequious or even a bit sarcastic.
As Adam mentioned, inflection is very important. These examples could be spoken in a way that makes them more of a demand than a polite request.
I tend to use "Could you..." mostly if there is some doubt as to whether the person is able to do what I ask. I think it's fairly common in AmE to make that distinction, but I'm certain some folks don't see much difference between "could you" and "would you", so it's not really a rule that you have to follow.
I tend to use "Would you..." mostly in situations where I'm asking the person if they would be willing to do what I'm requesting.