Icedragon,
Looking at that picture I feel your biggest issue is that you are shooting with fingers. When you switch to a release you will be able to draw much more easily and it will allow you to grip the bow properly at that point. I would stop driving myself crazy and getting discouraged about my shooting until you get to try a release. You will also find the arrow does not try and move around your release but just sits there like its supposed to. I had the same setup as you and tried to shoot without a release and gave that up immediately. Don't despair.