Here's what I have to say about each of the mistakes:
Mistake #1 - sometimes the closest shade still is not close enough. If it doesn't match your skin tone, don't waste your time buying it (Dont Be A Victim - How to Choose the Right Shade of Foundation or Powder offers some useful tips).
Sadly, some sales reps are just trying to get the sale and your best interest is not always their priority (read my 3 part series ERROR - That Is Not The Correct Shade For This Client to see what I mean).
Mistake #2 - it's the only skin you have, be as gentle as possible.
Mistake #3 - to apply my foundation and powder on mornings I always try to use the light coming through my window. When I used the light from the lightbulb it always looked heavier when I checked the mirror at work. I would then have to wipe off the excess because I don't like heavy makeup.
Mistake #4 - I'm not a part of the 'foundation on the neck' movement but wherever you decide to apply your make up blending is critical.
Mistake #5 - try using concealer if you want to cover any defects.
Mistake #6 - your face should never look as though it is covered in something (read The Key to Applying Everyday Make-up).
Mistake #7 - don't you dare miss this important step (read One Important Thing You Must Do When You Prep Your Face).
Hopefully you've figured out what you were doing right and what you need to start doing.
"...because your make-up should always enhance." - Nakita Squires