So many scales, so little....understanding...

Scales are just a way of organizing the notes used in music. As far as improvisation goes, they're not such much a "play these notes"... they're more a "be really careful playing anything besides these notes". It's a subtle difference, but a helpful one - many beginning improvisers feel compelled to use all the notes in the scale.

Back in the day I spent about a year studying improvisation with a guy named Paul Zibbits. He wasn't even a guitarist, but a jazz bass player. His approach was really helpful in the long run, and I incorporate elements of it in my own teaching today. It's built around limiting material so you can focus on just one element at a time.

At my first lesson with Paul he had me play five choruses of a blues while he comped at the piano. I could play whatever I wanted, as long as I played just ONE note (which was F - we were in an F blues). By taking melody completely out of the mix, my focus was strictly on rhythm at first... but five choruses is a long time to come up with interesting rhythms, and that led me to exploring dynamics and articulations (palm muting, etc.)

The next exercise he gave used two notes. I start my students with four adjacent notes - enough so it's not quite so boring, and plenty to explore the relationships between tones. Once you've done that for a while, add one more scale tone, and keep going until you're comfortable using the whole scale in one position.

Other drills he used took rhythm out of the mix - play all eighth notes with no rests, etc. Or play whatever you want, but in a specific rhythm.

Focus on one scale at a time, and don't move on until you feel you've got a really good handle on its possibilities. After a couple of weeks of practicing this way, end each session with a bit of free improvisation - you'll see that by limiting yourself during the development process, you'll now have all kinds of new ideas when you can do whatever you want.

You are best to stick to getting to grips with the minor pentatonic scale to get your improvising up and running - at least at first. About 90% of all the classic guitar solos we all know so well are built on the minor pentatonic scale and with good reason. It will work with all musical genres, you don't need to understand any music theory to get it up and running, its not that hard to learn and it has so much potential for applying numerous techniques.

There are five shapes to learn, but only five, though I would concentrate on the first shape to start with i.e. the one that starts with the root note on the low E string. If you want to watch you're guitar soloing skills really advance you will want to learn all shapes as soon as you are able.

Here is a link showing you all the shapes:
http://www.blguitar.com/lesson/advanced/5blues_shapes.html

Good luck!

I know how it feels to have a bunch of scales thrown at you, you are NOT alone.

I was curious as to how everyone seemed to just 'know' what notes to play, and all I found were scales and arpeggios and modes all these things that just confused me.

The key to being able to apply them to your playing could be broken down into a lot of different areas, but there is only one that REALLY gets you started: Just try persistently.

I dove in and I started with the minor pentatonic (an often recommended first scale). And after trying and trying and trying to play along to tracks, songs, and loops, I started learning how to use this simple scale.

Licks and Phrases begun to develop, and eventually after MUCH experimentation, I could confidently use this scale in any key.(And I am still improving today)

That self-development set the platform for ME to grow, rather than just play other peoples stuff. I could learn every lick but without trying to improvise myself, I wouldn't grow as much.

However, its hard to just 'start' improvising, it can feel lost and without direction. But the more you try, the more you will improve. And there is no harm in picking up some techniques from other more experienced players too, even a lick or two to add to your repertoire.

After understanding how i could use this one simple scale, I then looked into more scales, arpeggios, harmonic minor scales, modes and boundless resource I could add to my playing.
But it didn't start like that, so don't be afraid to sound average while you are trying to get your feel for the scales.

Keep at it!

I watched almost the whole vid; he has some good ideas about how to get knowledge into students and his use of fingers to work I-IV-V is the same as mine.

Don't worry too much about it. Most people stick to like 3 or 4 scales, it'll come over time