Sad to see you being downvoted when you're absolutely right. Yes, UDP is better for a twitch game, at the expense of a lot more work. No, unless you're building a AAA mouse-and-keyboard shooter, you probably don't need more than a TCP connection sending data packets back and forth using a somewhat well-thought-out protocol.
I think the biggest mistake is only testing the app on localhost. While real world users can experience up to 150ms latency and fluctuations. It doesn't matter if you use TCP or UDP you still need a strategy for handling different levels of latency. For testing I use netem to add delay ...
The second biggest mistake is trusting the client. People never cheat in online games, right !? smile Network latency is often less then it takes to render, so naive solutions with simple broadcast servers work well until you need to deal with rouge clients using teleport hacks etc.
There are no set rules when making real time distributed and scalable applications like MMO Games. In my experience it's best to start with a naive demo/prototype to see where the bottlenecks are.
I would suggest starting with TCP and then only switching to UDP, or more likely making your own protocol (TCP ontop of UDP smile), when you know the requirements.
