RPiB wifi fails to connect to wireless network

Question

I'm a rank Raspbian amateur trying to learn as I go here so apologies if I'm missing knowledge you all consider basic.

I've just installed Raspbian on my RPiB. Everything works and I am now trying to get wifi functionality. I can see the list of available networks but when I enter the key and try to connect nothing happens.

lsusb results in being able to see my Realtek wifi dongle.

lsmod gives the following:

cfg80211 501663 0
rfkill 22491 1 cfg80211

Wifi is configured as follows:

ctrl_interface=DIR=/var/run/wpa_supplicant GROUP=netdev
update_config=1

network={
ssid="network-name"
psk="network password"
}

with my networkk name and password filled in for ssid and psk.

When I hover the cursor over the icon it shows a working ethernet cable connection but for wlan0 it shows as "not associated".

I've done this several times now. I've confirmed the passkey by using it on my phone a couple of times to connect. Still nothing.

Can anyone tell me what I'm missing?

Thanks.

EDIT: Sorry about the gibberish. Still getting the hang of this platform.

So yes I edited the conf according to a guide on the Raspberry Pi forum. I set it up as dhcp and also static.

With ifconfig I get:

ifconfig:

eth0 Link encap:Ethernet HWaddr b8:27:eb:f4:4a:d4
inet addr:192.168.1.69 Bcast:192.168.1.255 Mask:255.255.255.0
inet6 addr: fe80::19fe:734c:f78e:f50f/64 Scope:Link
UP BROADCAST RUNNING MULTICAST MTU:1500 Metric:1
RX packets:68 errors:0 dropped:0 overruns:0 frame:0
TX packets:74 errors:0 dropped:0 overruns:0 carrier:0
collisions:0 txqueuelen:1000
RX bytes:6869 (6.7 KiB) TX bytes:13557 (13.2 KiB)

lo Link encap:Local Loopback
inet addr:127.0.0.1 Mask:255.0.0.0
inet6 addr: ::1/128 Scope:Host
UP LOOPBACK RUNNING MTU:65536 Metric:1
RX packets:140 errors:0 dropped:0 overruns:0 frame:0
TX packets:140 errors:0 dropped:0 overruns:0 carrier:0
collisions:0 txqueuelen:0
RX bytes:11888 (11.6 KiB) TX bytes:11888 (11.6 KiB)

wlan0 Link encap:Ethernet HWaddr e8:4e:06:24:b2:1e
inet6 addr: fe80::ed7a:2625:15ef:95dc/64 Scope:Link
UP BROADCAST MULTICAST MTU:1500 Metric:1
RX packets:0 errors:0 dropped:0 overruns:0 frame:0
TX packets:0 errors:0 dropped:0 overruns:0 carrier:0
collisions:0 txqueuelen:1000
RX bytes:0 (0.0 B) TX bytes:0 (0.0 B)