Stuck in the middle with myself

I'm in a weird place right now, linguistically. I have been studying Spanish for the last year now, and obviously the last three months of traveling and formally studying in a University have really started to pay off. I wouldn't quite call myself a Spanish speaker, but I'm close. And that is where the problem comes in.

I am now able to talk with most people, about most subjects. I can clearly communicate opinions and ideas (even though words are often lacking from my vocabulary). And I can understand most people, that is to say, I can understand the opinions and ideas that they are trying to communicate, even when those ideas are filled with slang, and riddled with colloquialisms. But then it all falls apart.

I don't really understand most of what is being said to me. If I was to be completely honest I would say I probably understand less than 50% of the words in any given exchange (assuming it's not just ordering food or asking directions, etc.). Yet, I often find myself sitting around for hours at a time having conversations with people, seemingly understanding everything, all while never really understanding anything.

What is this weird middle ground I am trapped in? If any of you have any profound insight on what it is like to be at this stage in learning a language, and how the hell I can get past it I would love to hear from you!