Yes, but anything can be a race if you set your mind to it, which is why we have terms like the "Embankment Peloton" to describe a class of aerodynamically-optimised road cyclists that commute eastwards during rush hour on their way to London's banking and legal centres:

https://www.google.com/search?q=%22embankment+peloton%22

Correct. A more widely used term (in my experience) for this sort of thing is a "pace line", which isn't always as wide as a peloton due to lack of road closure.

Paceline has nothing to do with road closures.

Riders form a paceline because of the crosswind which forces everyone to look for draft on the left or the right side of a rider in front of you. Eventually, there's not enough road for everyone to be in the draft and the first paceline is formed (also called an echelon).

More specifically though, paceline refers to the mechanics of the echelon, the way riders rotate, or take turns at the front to stay in the echelon. This rotation is the paceline.

Pelotons - the race variety of a paceline - can only be safely formed with road closures because they typically swell to fill at least one lane of the road. They are not just 1 rider behind another, but often 2-4 riders wide.

Pacelines for group rides and the like can be formed whenever, and they do not form just because of a crosswind. When I used to train with a group, we would almost always form pacelines in single file, on every ride.

It just means platoon in French.

Interesting, I’m not a French speaker but my Spanish is OK. Always thought it was rooted in “pelota” as ball - but after looking both meanings are accurate just one being a bit more literal

You are right, from [0]:

1630s, "a small body of soldiers acting together but separate from the main body of troops," from French peloton "platoon, group of people," literally "little ball" (15c.), hence, "agglomeration," diminutive of Old French pelote "ball" (see pellet).

[0] https://www.etymonline.com/word/platoon

Indeed didn’t associate “pellet” with these words before either

It is being used to refer to pro cycling fraternity. "The rumour going around the peloton..."