Thanks to everyone for their great suggestions.  You insipired me to stop whining and get to work on things. 

I took a day off from playing my guitar.  Then I started over again with lesson 1 and all the following lessons pertaining to Guitar 1 (acoustic).  

Using the very lightest pick I have (Jim Dumlop .46 mm), which conveniently has raised lettering on both sides, I played along without dialing back the tempo.  I didn't lose my grip on the pick and by strumming very lightly there wasn't a lot of clicking sounds, which I sometimes get with this very light pick.

I also have learned to adjust the video quality to the lowest possible setting.  My internet service is so horribly slow that at high quality there is a lot of buffering, which makes playing along nearly impossible.  This is especially true if my husband is downloading something on his XBox.  And the lower video quality is good enough.  It's like watching TV that isn't hi def.

After doing all the slow plays of the verse and chorus, I decided to go right to the full performance.  Amazingly, everything seemed easier and more natural playing at the correct tempo - I didn't dial it down at all!  Hearing the vocals was really helpful.  Because I'm so familiar with the song, the chord progressions just came naturally without having to think about chord changes.

I also use a hint that Anders suggested.  Sometimes in the last measure before a chord change, it's okay to lift off all strings on the final sixteenth note while you make the switch.  It's more important to hit the new chord solidly.

All in all, today was successful.

Thanks again for the encouragement and great ideas.