You've answered a lot of your own questions

Please take the advice of others that have posted before me as the words are mostly truths and confirmed by my own exp and read literature... ahem
I didn't see you talk about your PUA learning. If you dig into PUA material, you will see any PUA will talk about self improvement being just as important as the women. What have you learned about pickup that brought you here? The one good thing I noticed is that you take care of yourself. That is a big thing, a lot don't. So focus on improving on other things.
What is holding you back is your self limiting beliefs (such as being bad w/ small talk) which stem from your attitude, like others have pointed out. When it comes to talk, guess how you get better at it? Practice. You don't have to go after just women. Try small chatting with other males. The leader of men is also the leader of women. From what you say, I doubt you have a large social circle. I didn't and it hurt me for a good part of my life.
There are many programs about things to talk about. Clothing, Relationships, Culture/Music - those are always interesting for women and most people. That's why folks like Mystery used canned material, it was so they had something already in their head to say. As long as you know a little about a lot, small talk is easy. For example, today, in this line at subway there were like 20 people lined up. I was pissed about waiting, but I utilized my time to chat up a random guy wearing a Redskins lanyard, in front of 15 other people. Of course, as is the norm, no one said anything to anyone else before me, while I was there at least. I talked about how they are my dad's favorite team, and as the chat went, we talked about other sports teams, where he was from etc. Take those opportunities to chat when there is less pressure, and it will get really easy.
I think you need more practice just talking with people. Like I showed above, the reason I can chat that guy up is because I have a lot of practice with both sexes. Another thing from your approaches, you need to spend more time talking with the woman. Of course this will be easier once you learn how to (interestingly) shoot the breeze with people in general.
Ever hear that 90% of what you say is non verbal? By dressing up too hard, you might be saying "I'm over compensating for my inability to talk." If you want to dress like a clown like mystery, that's fine, but by being a good talker, you are demonstrating you are a man of high value, as you are around many people, and talking is easy for you. This subcommunication is more of what you want to do, instead of being direct. The more directi you are the more likely you are to fail. I bet you if you go up to 100 different women and say "I want to fuck you!" you will be denied 100% of the time. That's why you see those "fat ugly" guys with women. They don't give a shit as someone pointed out, but they also are probably good with words/subcommunication.
Women are more emotional and tonal than men are. Therefore, you should not fault them for not seeing the full you. That's your fault, and where you need to improve yourself. You need to learn the proper way to project yourself. That's what the true message of great PUAs.
And one last thing. Once you get laid, you will realize you were stewing for nothing.
