So I have thought A LOT about what my issue was. Thanks to some people posting responses I think I get it now. Here are the issues:

1) I am unable to express myself fully when approaching girls because I am not a "what you see is what you get" sort of guy. I may be authentic, and say what is on my mind but small talk doesn't bring my best most interesting self. I have many layers to my personality which means that a single date or bumping into a girl doesn't give her the right impression of me.

2) I thought I had approach anxiety (not in clubs at bars, I do just fine there) because I didn't want to be rejected. I don't, but I have a deep seeded fear of being rejected later on, which explains why I don't have anxiety in situations where I don't have to be myself. I can't count how many tines I get blown off on the third date. Once girls get to know me they do lose interest. Julien was right, this whole game is causing me a lot of ego trauma. I am not being rejected for looks or shallow things, I am being rejected for who I am, by every girl after they get to know me. It sucks, there is nothing I can do about it and whenever I see girls it becomes really hard to justify going up to them. I know they will love the shallow, small talk me.

At what point do I objectively decide that my attitude sucks and that I need to change something about myself without compromising my identity. I don't want to be simple minded and positive all the time. But every guy who is successful seems to turn into the same person, and then pretend they don't care what others think after they have changed themselves to achieve more validation.

In other words it seems like changing oneself is unavoidable in this area, unless you pretend to be someone you are not, in which case you will always lose out unless you're a cold sociopath who values ons over meaningful relationships.