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She tells me she has a free house that night in the middle of our convo.
You should of kept this in the back of your mind throughout the entire seduction. If you played it right I think you could of fucked these girls.
Here is where you went wrong...
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It ends up being her friend and her dancing a lot on their own (me and my friend felt weird at this point, so we went and danced with other girls/guys right next to them). I look over a few times and catch her looking at me.
And then again here...
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Anyway, me and my friend get drinks and get back just after it goes midnight (with the countdown). She says something about all guys wanting the same thing, I was with other girls, etc... I said I like her but I don't want to play any games.
Point one would be basic pick up knowledge. Girls are very contagious to emotions, when you and your friend started to feel uneasy on the dance floor, it is possible they would of picked up on that. The key on the dance floor is to be completely comfortable in your own skin and confident with hot girls around you.
If you were dancing with other girls and they were looking over this is no problem at all. It's your response to her statement about all guys wanting the same thing that fucked you up. Personally I would of just smiled and turned it into a flirt.
You could of also used the midnight countdown to escalate and make out. Then start to take the lead and take the interaction in the direction that you want it to go for the outcome that you want. They didn't tell you they had a free house for nothing.