Short reply, I don't have too much time. Sorry about the shitty lack of quotes but yeah, time issue.
1. Paragraphs - yeah, they don't necessarily have line breaks after them (in fact I think it's technically bad form to put blank lines in between paragraphs, though I may be wrong there). It's usually just a first line indent to show a new paragraph. Keep in mind that when quoting text over 3 lines (I don't think this actually applies to speaking) you use a colon and indent the text with a blank line before and after it. Aside from formatting for section titles and such that's the only time I can think of where a blank line definitely should be used.
2. "I did it like that..." I exaggerated for effect, I have a tendency to do that I'm afraid
But there were some parts like that, not as bad as my example but still in need of fixing. And I don't think anyone's competent enough to be an author when they write their first book. It's more a matter of having the patience, will and dedication to actually do it. The rest comes with practice I guess, though hey, I've never written anything longer than 50 pages so I really don't know haha.3. Different speakers part: Whoops, I didn't realise they were different speakers, I thought it was all the same person. That's the right way to do it (though on different lines of course) in this situation, and I think it really emphasises the point of having conversations on different lines.
4. If you feel inclined, please post larger excerpts. I like editing writing for the most part and I'd be happy to help more if I can.
5. I'm glad you see what I meant there, I kinda hit a roadblock explaining it. But yeah, using dialogue and narrative to convey detail is important. Try to have your details lead somewhere so it doesn't slow the whole thing down. Also, the more interesting the description the better, use (but don't overuse) comparisons and interesting, though not necessarily big, words to help paint a more vivid picture.