The only thing you can do to get better is to practice. Yeah, that might mean that you'll play the same song over and over and over (which I don't recommend). Personally, I went with at least 2 or 3 at a time, so I could rotate through them. Really, practice is the fastest way, and expert sightreading is a long term investment.

As for notation, if you care only about being able to play the music, you can largely ignore the lettering, meant to indicate that stuff is being played in a certain key; if you just want to play, you won't need much of the musical theory. As for scales, they're useful for fingering and for key signatures, but are otherwise not terribly important to know. Most songs these days are transposed into C Major (no accidentals), G Major, F Major, and A Minor (all with one).

If you are having trouble with hand position, wrap your hand around a tennis ball. That's almost exactly how your fingers should be if you want to be able to play properly.