So in your game if you are surprised you are paralyzed? You can't flinch? If I have surprised you I can walk straight up to you and stick a dagger in your heart and no amount of fast reflexes can stop it.
If you walk up to him, moving out of hiding, then your target can see you and react if he has the higher initiative. This is the flinch. If you shoot an arrow, miss, and it clatters against the rock, the target has evidence that he is in combat and can react to anything he can perceive. If the arrow hits, the guy knows he's in combat.
But if the arrow is invisible and silenced, and misses, and you remain hidden, there is no way for the target to know he's in danger. He must be just as vulnerable now as he was a moment ago.
You are right about the first bit. You can't defend against it through normal means. The assassin still gets advantage for being an unseen attacker, they just don't get an auto crit. This is well represented in movies and tv shows.
Why is this hard to visualize? Or even understand that these are the rules? The rules should at least be as clear as day, especially now with the sage advice clarifying them.
It's hard to visualise that a totally unaware person can be made aware, not through what he perceives but by a Dex check! Why is
that so hard to grasp?
When your initiative comes up you are right that you have nothing to react to. That is why reactions happen in reaction to things. You don't cast shield on your turn, you cast it when you are hit in an attempt to not be hit.
Have you banned the shield spell in your games?
Shield, in terms of the action economy, is a reaction which can only be taken if you are hit by an attack or targeted by
magic missile. When cast, you can change a hit into a miss, meaning that even though the trigger was 'you get hit', the spell results in you never getting hit in the first place!
The spell does
not represent the 1st level wizard getting a javelin through his head, killing him by massive damage,
then casting the spell(!) and having the javelin slide out of his skull and the wizard being resurrected and standing up from prone!
The spell represents putting a mystical shield between you and an attack, in response to an attack which
would hit you if you didn't cast
shield.
It also means that you must be aware of the attack
before it hits, in order to actually use it. You can't cast it after it
actually hits and damages you in the game world, only if it
would have hit if you didn't get the shield up in time, represented in pure game mechanics as a successful attack
roll.
If you don't know that the arrow is coming toward your head, then you cannot use
shield to react to it. If the assassin charges out of the bushes into plain sight,
shield away!