Isn't the shortened "dem" in "im" and "der" considered Artikel?
That's right. Probably, the linked dictionary should rather state that for meaning 1), the term "Westen" can be used without an article, though there are also occurrences with an article, depending on how the word is used.
Furthermore, as you correctly noticed, the examples unfortunately only cover the case where the term is used with an article.
Thus, when used as a compass direction, two cases need to be distinguished:
- Do not use an article when referring to "Westen" as a mere direction.
- Do use an article when referring to "Westen" as the location that is located in the stated direction.
That is, something moves "nach Westen" or comes "aus Westen" or "von Westen her" because here, the focus is on the direction, no matter where exactly the movement leads to/originates from.
You know some detail about "der Westen", because you are referring to the place that you would reach when moving westward.