Well my fire control range is 32000 max, and the missiles are passing me by in a 5 second interval, so I doubt it's the range as the missiles are still in range, just behind me. And I have no idea what Final Defensive Fire is. Where do I see this option?
Battle Control Window (F8) -> the top-right blank box.
It's labelled as 'Change Point Defence Mode for SFC'. Select one of your ships. Once you've done that, a number of options will appear in the box:
None
Area Defence
Final Defensive Fire
Final Defensive Fire (Self Only)
None is selected by default. Area Defence is governed by the smaller box below that one, which allows you to enter your desired max PD range in units of 10k km; this is used for laser PD and similar, which are long ranged enough to engage missiles before they strike. Final Defensive Fire means that the ship will engage all missiles which target it or any other friendly ship it is grouped with in the same turn that they detonate, ordered to take place before they do so, provided that the weapons are ready to fire. Final Defensive Fire (Self Only) does the same thing, except that each ship will only target missiles aimed at it, ignoring those aimed at allies.
On the ship you have selected, set each PD fire control to Final Defensive Fire by selecting it and clicking the 'Set Mode' button, then click the 'Copy Race' button just to the right of it to copy the same assignments over to every other ship of the same class, same as you would for your weapon-to-FC assignments. Regardless of which option you select, it manages PD for you, automatically firing at enemy missiles which fall under the option's parameters (AD = any missile which spends more than one 5-second tick inside your engagement envelope; FDF = any missile which is about to conclude an attack on any friendly vessel in the same group/location/whatever; FDF(SO) = any missile which is about to conclude an attack on the firing ship).
With only 32k km max range on your FC, I'm assuming you're using gauss turrets. The most likely cause for them not firing on the missiles initially is because the weapon range is small enough for the missiles to cross it in a single tick, and if you don't know what the PD FC settings are you won't have them set to FDF, which means that you don't get the benefit of auto-defensive fire. When they went past it was likely the same thing, the missiles either crossed your range or were on a course offset enough to not pass through it and so weren't fired upon.
Remember to tick the Max Fire Control Range and Max Weapon Range boxes on the Display 2 tab of the system view window; it gives you precise circles around all of your ships which show exactly what you'd expect them to show, including their radii