Hey Alan:
I can relate to your entire posting. I also play a couple instruments and a couple really badly

. and I can't read music much at all, at least not fast enough to put to use. My primary instrument is acoustic guitar. I do use a capo quite a bit. For two reasons, one is naturally to change the key but also the fact that I have really short fingers and if I capo at least a full step the frets are a wee bit smaller and I can stretch further. This helps me with some chords that I just can't reach otherwise. My lyrics seem to most times come after the music and they come in spurts so to speak. I may be working on a tune and this morning work on adding a verse that came last night. Tomorrow morning I may have two or three verses and sometimes nothing. I just don't push it too much and let it flow. I am usually working on a couple tunes tunes and may put one aside for a wee bit. I have a folk ballad I started on last winter. I have the music down pat and the 7 verses of lyrics and refrains but still have not been able to call it done. I haven't worked on it in a couple months now. I had to get away from it. It's like being stuck in mud and the tires just spin. Eventually I will get back to it.
One thing that I have found that has helped me is some friendly competition. I use Kristal Audio Engine as my primary DAW and have belonged to the Kristal Users Forum for a year now. Each month we have what we call a "Kristal Challenge", they have been going on for years. Each month the previous month's winner sets the theme for next months challenge.
This month the theme was "State of the Nation", last month was an "epic about science or history, etc. Normally the songs have to be 2-3 minutes in length. I try to participate every month. I find that this format really pushes me to produce something not of my choosing. Plus I am working against the clock in meeting the entry deadline. We usually have 3 weeks or so.
I can relate to the naming of chords!! I got a couple I use that I still have no idea what they are!

I try to use the more of the neck these days, below the third fret so to speak.
Something that has helped me with expand chord choices has been recording some cover tunes. Until recently I had not recorded any cover tunes. I just can't sound like someone else. Then it hit me I don't have to. All I can do is my interpertation and have fun. I have picked up quite a few new chords that I like using this way. More importantly I have improved my style of picking (the right hand) by doing the interpertation. Plus it has helped me understand better the actual structure of a song.
Also another thing I have found in the past few months that really helps are collaborations with other musicians. I participated in three so far, one on background vox, one on lead guitar and one on acoustic guitar. Lots of fun to do and you really learn lots about recording and mixing.
I think most importanly for me is the I play a lot! Especially in the fall and winter. Year round a minimum of an hour a day, average 2-3 hours and sometimes I loose track of time.
Sorry didn't mean to ramble on. I got a couple tunes in the folk bashin forum give a listen if you have time and feedback is most welcome good or bad.
Later
awg