In conventional and high transition temperature copper oxide and iron pnictide superconductors, the Cooper pairs all have even parity. As a rare exception, Sr$_2$RuO$_4$ is the first prime candidate for topological chiral p-wave superconductivity, which has time-reversal breaking odd-parity Cooper pairs known to exist before only in the neutral superfluid $^3$He. However, there are several key unresolved issues hampering the microscopic description of the unconventional superconductivity. Spin fluctuations at both large and small wavevectors are present in experiments, but how they arise and drive superconductivity is not yet clear. Spontaneous edge current is expected but not observed conclusively. Specific experiments point to highly band- and/or momentum-dependent energy gaps for quasiparticle excitations in the superconducting state. Here, by comprehensive functional renormalization group calculations with all relevant bands, we disentangle the various competing possibilities. In particular we show the small wavevector spin fluctuations, driven by a single two-dimensional band, trigger p-wave superconductivity with quasi-nodal energy gaps.