It took me a while to get the hang of bread, same sort of end result as you're getting. I'm pretty sure the yeast was where I was going wrong, I'd got the water too hot as I read "hand hot" as just comfortable to put your hand in rather than the same tempreture as my hand. Once I figured the tempreture out my yeast started to froth better and the bread improved.
Second to yeast I think it's all in the kneading, the more springy and stretchy it is when you leave it to prove the better the rise. Does that help at all?
Have you tried using the sponge starter method, and dried active yeast rather than the fast stuff? You basically activate the yeast in the water (usually with a bit of sugar to help it get going), then stir in enough of the flour to make a thickish batter (sort of drop-scone consistency). Leave that at least until it's doubled in size (you can actually leave it overnight), then add oil (if using), salt, and the rest of the flour, and knead it for 10 mins. You do need to knead for 10 mins, as it takes a while for the glutens to form, and this is what gives a really good texture. Then you need to let it double in size again, and then you can put it in tins for its final rise. Heat the oven as hot as it will go, and just before you put the bread in, throw a small amount of water in. That helps you to get a really good crust. I make my bread like that, and it's always very, very fluffy and soft inside, and beautifully crispy outside. It used to be awful before I started doing this though...
Forgot to add - the long kneading and several hours proving (leaving to rise) is chemically what you need for a light crumb - the kneading, as I've said, activates the glutens, but the proving saturates the dough with carbon dioxide as the yeast 'breathes', and it's this carbon dioxide that creates the 'lift' in the bread when you put it in the oven, and makes the bread light.
I beg to differ slightly with both whydo and BRSki. I mix 2 thirds cold water and 1 third boiling water. I am sure that the other way around would be too hot.
I then mix half the flour with the water/yeast and cover with clingfilm and leave all day or overnight (at least 8 hrs anyway). As for kneading, I probably only knead for about 7 or 8 minutes in all, but only for 2 or 3 minutes at a time. I let it rest for about 10 minutes between kneads. This allows the yeast time to work on the newly added flour, sugar and fat (Butter or Olive Oil) and give off CO2 which the subsequent kneading can redistribute. My loaves are very light and fluffy inside.
The other benefit of the Half-Sponge method is that the longer ferment gives improved "keeping" qualities. A loaf can last a week without going stale.
Agree with 4merly, 2 thirds cold + 1 third boiling water.
Also there are 2 different types of dried yeast. Active Dried yeast generally comes in sachets and you add that to the flour, then add the water. Dried yeast generally comes in little tubs and you add water and sugar and when its bubbling away you add it to the flour.
Also make sure that you really have left your dough to at least double in size - I rarely find that this happens in an hour (which is what many recipes say).