So I've tried a lot of resources out there( the free ones) on the internet, from YouTube to PDFs. But my progress is not much. The basic stuff like major scale is clear to me only in theory, but I don't know how to use that practically. I want to feel music but I also want to know what I am doing theoretically while I am playing. What am I doing wrong? Please help.
It's a very natural thing to feel a disconnect between the practice of playing music and the theory. Just be ok with it for a while and keep absorbing information. It's important to realize that theory is only description and not prescription - it gives labels to things we might hear.
So the first step might be trying to identify lets say major scale in a recording or you own playing. You might hit a stumbling block there - the realization that in order to identify a scale you need to be able to recognize it by ear. And here we touch important subject of what actually knowing something of music theory means. If we can't hear these things they are only a string of labels. That's why I think ear training should go along with absorbing a theory. Otherwise it is like a memorizing a book in a language we don't understand.
A good example of how theory might be actually useful and practical in relation to the guitar is modal scales. Once you understand how the modal scales are related to each other you might have another realization that instead of having to learn 7 scales in 5 different places on the neck you only really need to learn five different fingerings.
Another example: chords - once you understand how they are build, which notes are important and which ones not really neccessary, you will gain a lot of freedom and confidence when it comes to many ways of playing a single chord on the neck. And so on...
What you are asking is what is the best learning method. I can only state the method I use which works for me, but maybe not for anyone else. My main study source is books, and some are pretty easily understood, while others are just confusing. I find books that aren't so confusing and study out of them. My most effective study method involves writing down the information contained in the book, either word for word or in the form of taking notes. That's the first step. My brain is required to process that information in order to write it out. Then comes the second step. I go to the computer and type what I've written into a document. This also makes my brain think about the information I'm typing and seems to increase my comprehension of the material. An added advantage is that I now have a document that I can print out, fold up and take with me to study again if I have a few minutes of spare time. I would think this method would work for self study as well as with an instructor, but either way it requires an investment of time.
If you understand scales, intervals and the building of chords
it is important to work with the circle of fifths
play hundreds of songs and write the chords above the lyrics.
write the chord pogression again on the bottom of the sheet
analyze the chords and write them down in all kinds and systems of notation: sheet music in grand staff, the guitar pattern, the tab system and the keyboard pattern. The latter one is the most important as the keyboard represents the western tone system.
I've learnt guitar playing by myself too. But I knew the theory of harmony and the chord theory from piano playing. So I was able to construct any chord on any bend and had no problems understanding the tab notation.