I have had formal music theory training. I didn't really blossom as a performer until I learned to play by "ear". I learned to identify all common musical intervals by ear, that is you play two notes and I will tell you what interval (relationship to each other) the notes are apart (third fourth fifth etc.). THIS MADE ME MUCH MORE CAPABLE as a musician and only took me and a musical instrument and some time. Now I commonly get called to sub for bands where there is no rehearsal and I am hired cause I can "fake it" really well. Actually I know a couple hundred popular songs and ask for a list that I take home and learn the ones I don't know mostly by listening to recordings of the material.
It is not necessary to read the intervals just hear and be able to identify them on your instrument.
Practice till you can accurately identify any interval in under 2 seconds and you WILL notice a difference in your ability to play with others.
Listening intently to a lot of music can't hurt also...
I have a tendency to be very hard on myself for no good reason, perhaps you are as well? Enjoy your music that's what it's for. Don't get lost in the JOB part just make it FUN.