When is the wisdom tooth extraction needed? My upper wisdom tooth is rubbing against the gum on the lower jaw causing severe discomfort.

Common problem. You should have your wisdom teeth evaluated by your dentist or oral surgeon. When insufficient space is present, they can put you at risk for infections, damage to adjacent teeth, and other types of oral pathology. It's typically best to treat them when you are young, as the surgery and recovery tend to be easier.
A good solution. Pending reviews of history and symptoms, extraction of a malposed third molar should solve this problem.