I suspect that you are drawn to this cyber-relationship because it gives you an element of control, and i I feel from your posts that you are quite insecure in relationships, which is why this type of interaction works for you.
As you have realised, making this 'real' is a whole new ball game - it can't be comfortable meeting someone for the first time, when they already know what you look like naked!
I would advise that you cut your losses and move on. It is unlikely that a 'real world' relationship with this guy is going to work - you will both have too many issues at the start which will be difficult to overcome.
If you want to stay cyber-friends, fine, and cut down on what ever does not make you feel comfortable, but I would avoid any face-to-face contact.
Try and develop a social life with some friends - no pressure - relationships which find and develop their own level are fare more comofrtatble, and likely to be successful.
Take everything a step at a time, and remember - everyone else feels insecure too - they may just hide it better!
Good luck.