For security reasons the bitcoind and wallet are on separate server from the site.
The communication between the site and bitcoind is over SSL RPC.
php on the site side
Now I would like to encrypt the wallet, but then how do i remotely decrypt it to send money?
to be honest i really don't have idea how this would work
I really hope you are not running any service, this is very basic usage.
First you unlock the wallet, then do the operation you want. Check out the walletpassphrase command.