I feel Terrible is that how im supposed to feel? HELP!?

It's obvious what's going on here. I've been through the same thing. He idealizes Cara, and therefore he won't let go of her. He might never start a relationship with her, but for some reason, he likes her and he's not giving up. He'll probably waste away six months of his life trying to ask out Cara, and then he'll finally be flat out rejected by her, at which point he might try to ask you out. Don't become his second choice. He needs to realize what he missed out on. And don't worry about what you told all your friends... stuff happens sometimes.