In simple words, W-E theorem states that the net work done by CONSERVATIVE forces on a body  is equal to change in kinetic energy of the body. The kinetic energy includes sum of rotational and kinetic energies. That means simply sum up the work done by forces on the body: it is equal to change in KE of the body. Remember here that work done by force is important,not the force. It may be that force is present but it's work is zero. 
Now for the sign convention. Using a fixed sign convention for a question will give the same answer. But generally adopted convention is that if displacement is in same direction as force, work is positive, in opposite direction is taken to be negative. A point in which confusion occurs is that be careful about work done by body and work done on body. The sign convention is for work done by body.
For example. In compression of spring,we apply a force to compress it. The displacement of spring is in same direction as we apply force , so work done by us is positive ,. Or we say work is done by us(work done on us is negative). But for spring it applies a force outwards and instead gets displaced inwards. So work done by spring is negative Or you say work is done on the spring. (Work done on spring is positive)
Hope it clarifies your doubts