Confidence and socializing abilities are no more related to dance skills than to any other skills. For me personally it is even contrary - the longer I dance, the less confident I feel about my dancing. "A vivid dance community" is just another option to go out and meet people, and does not necessarily imply quality dance instruction.
I highly recommend a book "The Brave Athlete: Calm the F*ck Down and Rise to the Occasion" (I discovered it thanks to this forum) - there is a chapter about confidence (I haven't started the implementation though).
Everything else equal, being attracted would be my last reason for changing instructors. The more pleasure I get for my hard earned money, the better.

Hey, and having an attractive dance teacher, as well as being able to afford private lessons, are a few little things to boost your confidence in the "vivid dance community".
But seriously, I find a few ways to deal with my mindset when having a crush on dance instructor. First, convince yourself that there is absolutely no chance (not even 0.001% but zero) of her/him being interested, nothing will ever happen and stop daydreaming and imagining possible scenarios. Just enjoy the lessons, because that is all you can get with her/him. Feel the body contact as playing and fun. Second, and this one might take time - find at least a few flaws and stop idealizing the object of your crush.
Don't take friendliness for granted. I think your best bet is to make good friends with as many women as you can (another little step towards confidence

), and stop obsessing about unsatisfactory dating life and failed relationships. You seem smart and successful. Get more hobbies if dancing does not take enough of your free time.
Btw, am I the only "newbie" finding these insider talks a little annoying (like #19 through #27 in here - totally unrelated to the subject)?