The advice about taking a class is really good advice, it will give you an instant boost of confidence. I've never been able to go to a class, never sewn a single piece of clothing, and try my hardest not to let anyone discourage me to the point that I want to give up...but it is so hard when it's a close friend coming down on you like that! I feel for you. I'm sure your friend was trying to save you some heartache, but honestly, quilting is a lot simpler than it seems.
The basic idea is, you have two pieces of fabric with some stuffing in between and you want to make it all into one blanket with some pretty stitches or ties to hold it all in place, right? It's just that most times, the fabric on top is made up of little pieces all sewn together. There's no reason you have to follow a pattern or do things perfectly. I've made over six big quilts in the two years I've been sewing and I've never followed a pattern from a book or anything, because it stresses me out too much. So I make a lot of patchwork quilts or design my own simple pattern after looking around at quilts I like.
It only has to please you. Your first piece doesn't even have to ever be seen by anyone else, but it will be enough to get you hooked beyond belief! Don't let anyone else's version of perfection mess with yours, you can do anything you want.
And I agree - ditch the paper, it is so different from sewing on fabric that it's not worth the time. Get a piece of scrap fabric and stitch it all up, use different settings on your machine and just get the feel for things. It will encourage you to see neat stitches forming on your fabric right under your fingers. It's kind of a rush to see things working right, and know you're the one doing it, or at least it is for me.

Okay, I'll shut up now, but I hope you feel better and more empowered!