Unfortunately there is no option to enable a notification to the event coordinator when a person has signed up for the wait list or a notification to the person on the waitlist when a spot is available.

When an individual submits information to the wait list through your Registration Form, he or she is simply added into your database as a contact record and is placed on the wait list for your event. To view these individuals, you must run the report through Communities > Forms > Registration > YOUR EVENT HERE > Reports > People: Wait List.

Please note: There is no option to edit the text that appears at the top of the wait list form. This is hardcoded. You can however edit the confirmation emails, as it uses the same email confirmations as the registration form itself.

Since being placed on the wait list is not treated as an "activity" within Sphere, there is no interaction placed on that person's record. With that being said, this also means that they cannot be taken off of the wait list. What I would suggest as an alternative is to create a custom profile field called "Wait List?" to be added to your wait list sign-up form. New custom profile fields can be created by going to Contacts > Database Management > Field Management > Manage Custom Fields.

See example below:

Once this is created, you can make this a read-only field on the wait list form, and set this to Yes by default (Communities > Forms > Registration > YOUR EVENT HERE > Webinfo Checklist > Customize Forms). This field will act as an indicator on the individual's record showing that they are in fact placed on the wait list. This is how it would display on the wait list form:
 
Once this person is registered and taken off of the wait list, you can change this field to No in his or her contact record by going to the Profile > Custom Fields tabs. This way, when you run the Wait List report, you can choose to add a column to view the "Wait List?" field and identify whether or not the person still remains on the waitlist.