You seem to be getting frustrated, to put it mildly, so my first advice is to take a break and get a fresh start some other time.
Other than that, here is exactly how I georeference images.
1.) Open your image outside ArcMap or print your image so you can look at it.
2.) Start up ArcMap. Make sure the georeferencing toolbar is added.
3.) Add some georeferenced data that you will use to match your image to. There must be some common features between this data layer and your image so that you can make a match (you must make at least three matches).
4.) Add your image using the Add Data button. The image should appear in the Table of Contents and in the dropdown portion of the georeferencing toolbar. Make sure the image is the selected layer in the dropdown portion of the georeferencing toolbar.
5.) Zoom the map so that your georeferenced data (from step 3) is approximately showing the area in your image.
6.) In the georeferencing toolbar, under 'Georeferencing' menu, choose fit to display. Your image should appear, but it's not georeferenced yet.
7.) Find one of the common features on your image. Click the 'Add Control Points' button in the georeferencing toolbar. Click on the image on the common feature to add the first control point. Click the common feature from your georeferenced data to place the second control point. Now you've matched one of your common features between the image and 'the world'. You can click the 'View Link Table' button on the georeferencing toolbar to convince yourself. In fact, get familiar with the link table - this is where you can delete control points when you make a mistake.
8.) Repeat step 7 at least 2 more times with other pairs of common features. You must make at least 3 matches. Try to spread them out across your image. At some point, usually less than 10 matches, the more matches you make, the worse your georeferencing will be, so don't overdo it.
9.) When you're satisfied, click 'Update Georeferencing' under the 'Georeferencing' menu on the georeferencing toolbar.
That's it!
This was a very long-winded way to say: use the georeferencing toolbar to match common features using control points.