Have you ever thought about what's actually going on in your mind when you listen to someone talking? If so, you may have already noticed that your brain is guessing at the words to come next before you even hear them!
It works with reading too. If I write "six of one", I can guarantee that the majority of you are already thinking "half a dozen of the other." And if I write "when it rains" you're already thinking "it pours."
This is pattern recognition, and it's a product of great amounts of exposure to language. It's the reason people laugh when you say "Get to the chopper!" in a bad German accent, and it's the reason games shows like Super Password were able to be so popular for so long.
In many ways, our brains are nothing more than elaborate pattern matching machines, evolved to recognize faces, landmarks, predators, smells, food sources. And it is thanks to this elaborate pattern-matching that we remember funny movie lines, or famous song lyrics, or catchy advertisements, or sports slogans.
Naturally, these patterns grow stronger with exposure. It's hard to get the birthday song out of your head after you hum a few bars. If I ask "who let the dogs out," it's almost impossible for you not to think of that song.
This is vital to fluency
Pattern matching is the very essence of fluency. You can learn all the grammar and pronunciation, and memorize every single known word in a language, and still not be fluent. Sure, you'd be able to slowly, and correctly, work out the way to say anything you wanted, and interpret anything you heard or read. But it would be too slow to be useful.
I'll bet a number of you are reading this right now and thinking, "yeah, that sounds like where I'm at." You're not alone. As I write this right now, that's how I feel about Italian. I know a lot, but I'm not fluent.
The key to fluency is giving your brain enough source material to build those patterns. And that means using the language. A lot. And from as many diverse sources as possible.
The importance of immersion
Conversations are a great way to do this, because you will get a lot of data from the other person's side of the conversation. Especially slang. But conversations can be a very frustrating way to pick up vocabulary, because it's hard to learn while also trying participate and respond.
It is for this reason that I believe so strongly in listening to lots of music in your target language: often enough that key phrases become burned into your brain.
Watch lots of movies, and when you find one you like, watch it two or three times. Let those key lines etch themselves into your vocabulary.
Read as much as possible. Books are fine. Blogs are better. The news is also very good. The more you see a group of words formed into a particular phrase, the more likely you are to remember that phrase.
If you want to get to fluency, you need to fill your head with strings of thoughts and phrases that come out together by nature, idioms and expressions and common ideas that come out instictively, rather than by deduction and grammatical construction. And that means spending lots of time gathering data and letting your brain do what it does best. The more time you spend doing it, the faster you'll reach fluency.