Okay, I typed up this like, huge post, and my mouse randomly spazzed out and closed the tab. So let me try this again.
You say you feel inspired by watching other people ride, you love your horse and have a bond with him, you enjoy riding, you just don't feel like you're good at it. All that seems to say to me that you should continue with it, you're just allowing yourself to believe that you're somehow not good enough for riding. There are so many different kinds of people who ride, and I would venture to say that almost all of them needed to work their way up. The kind of "natural talent" where someone doesn't need practise to make progress is extremely rare indeed. So rest assured that even the best riders started as beginners.
You're letting these feelings of frustration and confusion chase you away from something you clearly want to do! But the question is, why? I just want you to know that there are other people out there who struggle with the "little" things like tying knots. :P When I'm riding, even if I'm making mistakes and the trainer is telling me I'm making mistakes, I feel just fine. I don't know why, I don't feel awkward if I mess up when I'm on the horse. I feel that I have more confidence and ability in the saddle because things are less about memorisation and more about feeling. But off the horse, inwardly I'm going "THESE PEOPLE ARE GOING TO THINK I AM LITERALLY AN IDIOT." I get embarrassed and feel that I'm just not "cut out" for the "horse world". I just don't care, because I love horses. I just tell myself "I didn't grow up on a farm. I have a lot to learn. You'll never learn until you get in there and do it." These little twelve year-old girls half my age, doing everything so confidently and accurately...they made the same mistakes at one point, they were just younger, so it looks
like they were "born with it".
Example: my first day volunteering at the local barn, I was leading a horse out into the pasture. I was under the impression that you must always close a gate behind you straight away, or you're going to have a loose horse. But they assured me that I needn't close the gate until all the horses were turned out! So, I thought, surely I must need to lead him all the way out into the field, to the hay, so he won't turn around and run out the gate. This poor horse, he didn't want to move, kept giving me a hard time. They told me I could just let him go. Let him go, really, right by the gate?! >_< He was just giving me a hard time because he wanted to go and get a drink, and I lead him right past the tub of water. "Stupid human," he must have been thinking. After his drink he went right out into the middle of the field to eat. I thought I must have looked like I was torturing the poor thing, keeping him from drinking. That's just how they happen to do things there, and I'd never seen that before. But sometimes you just have to say "Oh well, I'm not psychic. I'm learning, I wasn't born with the innate knowledge of how everything horse-related is done, and how it's done at one barn compared to another."
I think, if I were you, I would look at a few different options: 1.) Sell your horse to a good home and take lessons at a place nearby so you can build your confidence and skill. I bet there's a place closer than an hour away! And make it on a schedule so you can keep track of your progress each week.
2.) Keep your horse and find a trainer who will either come to your house, or find one a distance away that you're willing to drive who will let you bring him to their facilities. Then take lessons on him! (Once again, on a schedule. This keeps you from letting your feelings derail you. It's like, too bad, it's Thursday, time to ride whether you like it or not.
) When your horse starts doing something wrong, the trainer will be able to tell you "When he does that, do this..." and you can practise those things even if you decide to ride him a bit at home.
3.) Take lessons at a nearby place on THEIR lesson horses and find someone nice and experienced to ride/work with your horse in the meantime. If I were you, and if you have the finances, I would keep him because you seem to really like him. Who knows, it could take just a few months of lessons for you to learn enough to ride him without feeling so miserable. From what you've said, to my mind, he doesn't sound out of control or dangerous, just in need of work.
There is no 4.) stop riding, in my opinion! :P Unless that's really, really what you want. But if it was, I don't think you'd keep going to horse shows and posting here and trying at this the way you are. Look how down you are, yet you still haven't really quit. I think that means you want it badly. Just some advice from a fellow (awkward) noob. :o