Dani--You're asking intelligent questions, and you're getting some excellent answers. But. You have an instructor. You should be discussing all this with HER. I know how frustrating it can get (believe me, I've been there), but you've got to have these conversations with your own instructor. None of us know how you actually ride. Knowing something in your head isn't even half the battle--you've got to be able to apply it at the right moment. Has your instructor ever asked, "There! Did you feel that?" and you said, "Um, no"? That's part of the learning process and it's got to be between her and you. We have no way of knowing which parts of all this you're really getting and which parts you're not. Neither do you--that's what your instructor is for. Make her help you!
I don't mean to belittle anybody who's been offering advice, because it all looks good -- but it's only writing, not riding and not seeing. SEEING is the important part.