I couldn't agree with this more!
I'm biased - I'm long-term single, by circumstance really, and now have zero intention of dating again. Once I realised the effort of finding a partner was deeply unlikely to bring sufficient rewards, I reset my expectations and got on with being single. So, in effect, I'm now single by choice and will not be changing that.
I'm often surprised by people's need to be with someone, as if they're incomplete human beings. I think satisfactory singledom is an excellent thing to teach young people, so they never feel the "lack" which drives some to settle for poor relationships. If you are whole, you'll only contemplate partnerships that truly enhance your life. I hope I'm making some sort of sense!
Anyway, you sound like an OK guy. I agree with you that online dating has elevated superficial appearances as a selection criterion. It always has been, of course, but, back when we met our potential dates in real life, presence and personality had a much bigger impact on our perceptions of a person. One of my best-loved friends is quite strikingly ugly. He's a fantastic bloke whose wife is a real catch by any metric. They met at a football event; I can't imagine they would've found each other by swiping through photos.
You're doing the right things, by the sound of it! Please don't let that daft woman's remark undermine your confidence, certainly not to the extent that you avoid socialising. You've evidently got plenty to offer as a person. Just keep going out in the world, and give your time to those (of either sex) who have something to offer you.
If your self-esteem seems a bit shaky on evaluation, one or two sessions with a therapist would help you to fix it.