I'm not giving up at trying though. I'm just not improving. I don't know how to observe the intricacies of the match because its so fast paced. Whenever I finish a match, I don't know why I lost because I don't know what happened. I can't read anything so I can't understand why I lost besides 'this guys damn good'
If you ever have a match where you're not sure why you lost, on the results page, press A while keeping an eye on the bottom right. An option should turn up when you get to the final scores round up saying "press Y to save replay". Do that and later, watch it again to see where you get hit and whatnot. I save most of my losses so I can learn from them :3
If you fight someone and don't know what their options are, then it's a good idea to pop into training with their character and see if you can replicate what they did: i generally find it easier to deal with something once I've done it myself a few times and can feel where its openings and strengths are.
If you're finding yourself getting read often then there's basically two possibilities:
a) you're being predictable. This either means you do the same things all the time or you're even just doing the same things most people who play that character do. I've fought a few people in for glory who seemed a bit like a stuck record: they had a set of things they would do and no matter how much I punished or evaded them they'd keep doing them
b) you're broadcasting what you're doing unconsciously. Most people have a way of moving and acting and deviating from it will often signal they're up to something. For example, if you play someone who moves around a lot and is very aggressive, then they suddenly step back and stand still, chances are they're going for a counter. They probably don't even realise they've broadcast it but because they've shifted their focus to what you're doing, they sacrifice their own inputs and suddenly become a lot less active. Likewise, when people are going to run in for a grab they'll often pause or shift their position to a comfortable distance before the run up. It's amazing but there's lots of interesting little cues you can learn to read if you learn to watch for them :3
As for the 'safety' of a move, hold down the shield button when you do something and watch how long after you do the move it takes for it to appear. That is it's recovery period and when you'll be wide open. A move being 'safe' usually means you can recover and act faster than your opponent if they block it, or it just has such absurd range that they'd also have to use a ranged option to hit you afterwards :3
Your mention of chess is interesting because ultimately fighting games are kind of like a stupidly fast game of chess but where you both take your turns at the same time
Admittedly though, some kind of skill-based matchmaking in the game would definitely help :/
edit: Reading over this I make it sound like you have to be some kind of amorphous, ever-changing fighter but it's not really that extreme. Simply having 3 different options for something, each requiring a different answer from your opponent, is more often than not more than enough to start and maybe even carry you through a lot of things. For example, a lot of players have only one approach tactic (run in with the running attack) which makes it easy to just block and punish. If you sometimes run in and grab while other times running in with the running attack, suddenly blocking isn't a 100% answer. There's obviously more to the game than just 'block' or 'dont block' but that's an example of just one extra option making things less predictable and more dangerous for your opponent :3