Your description makes belief sound like willful ignorance.

Maybe, maybe not. In the absence of evidence, belief may be harmless, though somewhat pointless in the sense of Hitchen's razor:

What can be asserted without evidence can also be dismissed without evidence.

and Newton's flaming laser sword:

That which cannot be settled by experiment is not worth debating.

It certainly becomes willful ignorance if the believer avoids and/or actively rejects contradictory evidence.

It sounds like the real challenge is knowing when you have enough information to convert your educated guess into full-blown knowledge

The educated guess (hypothesis) becomes knowledge when it can be demonstrated by direct experiment rather than inferred/constructed from related knowledge. Also it's important that the educated guess be testable/disprovable somehow, at least in theory (Popper's falsifiability principle):

Every genuine test of a theory is an attempt to falsify it, or refute it.

So, belief is benign when it exists in an untested/untestable area and the believer is not bound to the belief emotionally. Belief is malignant when it exists in a tested area or when the believer clings to the belief emotionally. Belief is either harmless or extremely damaging, but in either case of no practical value.