Are repeated obstacles in seeing the girl for whose engagement one has sought divine guidance (istikharah), in addition to some unfavorable visions, a sign that this matter is evil and a diversion from Allah Almighty, and should one stop trying to see her or continue to do so?

What you saw in the dream may not be related to Istikhara, as it could be a self-dialogue due to excessive thinking about the matter. A dream is of three types: a righteous vision, a sorrowful dream from Satan, and what a person talks to himself about. There is no harm in continuing to try to see her, or to look at her picture if possible, while observing the Shariah guidelines. You can also seek comfort in your mother or sisters seeing her, but do not rely solely on that instead of a direct, Shariah-compliant viewing.