What should I do about my feelings of guilt towards my former fiancé who was affected by the dissolution of the engagement, and towards my father due to the dispute that occurred between him and his sister as a result of that?

The fiancée has the right to annul the engagement, even if the suitor is religious and of good character, because engagement is merely a promise of marriage. It is advisable to agree to marry the young man if he is religious, of good character, and a relative, while repeatedly performing Istikhara (definition) (prayer for guidance). As for causing discord between the father and his sister due to rejecting the engagement, there is no sin in it, unless it was done by inciting discord, in which case repentance is necessary and efforts should be made to reconcile them.