Its like I'm reading myself all over again, lol. Western is not common where I live either, but I was at the point to where if I could just ride ( I don't have a horse) I'm happy. Odd enough when I wasn't looking for western riding I found an instructor that does teaches both disciplines. LOL
Lunge lessons are a very good idea. Most people would just put me on the horse and expect me to ride. My issue was that I didn't know what to do on a horse, if that makes sense. I felt like I was trying to hold on to the horse and steer, in other words being a "passenger" instead of a "driver." I didn't figure out until about 5 years later when Katy mentioned that I have not "mastered" the basics of balance and moving with the horse, which was why I felt uncomfortable.
When I found this new instructor she mentioned the same thing Katy did, so from then I knew she was a perfect match. I had one lesson with her and I've learned more from her in that 1 hour than from the 5 years I've been trying to ride.
I don't really have any tips as your confidence issue is different than mine, however the one thing I will say is don't give up.
I was at the verge of quitting riding myself due to some nasty people, however learning to ride is a huge passion of mine. I have no interest in showing just riding for fun. My previous instructor made me feel really insignificant and stupid, which I learned is very common in the horse world. However there are people out there that do actually want to help
others learn and become good riders. They are hard to find and it may take a while but its worth it.
Please keep us posted!