Many people do that Hayla. I do that as well i.e. fantasizing and creating my own world of imagination in which everything works out perfectly.It is one of the go-to responses when you are anxious about something for all that it doesn't often work very well.

Again, this is merely my opinion, my interpretation of things from the tidbits I've gotten from you and liable to being completely wrong. If so or if it brings up bad memories/feelings, I deeply apologize for that.
As for connections, a genuine connection tends to grow very slowly. There is simply no rushing it. You may not be pushing people away only due to rush as much as pushing potential friendships away because you fear what the (eventual/possible) loss of it will do to you. This however is something you can change with time if you wish to.

As for advice on recognizing cues, I'm afraid I am equally lost there. I do however wish you luck in your endeavors. May you find many good friends to surround you.