Well, you've given me a lot to respond to, and I'll have to take it in stages. I hope other people will not find it too much to take in, and will be encouraged to weigh in with their own thoughts as well.
To begin with the sample of your own writing which you have obligingly provided as a place to start:
A wind blew over the prairie, making it obvious why the Havoans had called this place Chutenka, the Green Sea. Had called it, Bobby knew, because there weren't many Havoans left. Most had died in the Expansion Wars as Jerichans kept pushing the borders of their new nation ever westward. The grass rolled in waves as the wind blew south, into Bobby's face. He felt the stink of the cow drying on his hand and wished he hadn't kicked that bucket over. I can't do this forever, he thought. I can't run this ranch. Storm clouds hung over the north horizon. They'd be in before dark. Got to get the horses in. Got to get the cattle in the western greens, inside the fence, before they scatter. I can't do this. Can't run the ranch. Lightning in the distance. If my brothers were here. The war has destroyed everything.
For such a close weave of narration and inner dialogue to work without any hitches, my own opinion is that you’ll have to make sure that while you are using it
all the narration will be strictly focused on those specific things that your viewpoint character (in this case Bobby) sees, feels, thinks, or notices at any given moment.
This can be very effective, if handled rightly, because it can build up a very intimate identification between your character and the reader, but the cost of doing business this way is that you can’t, for instance, describe any part of the landscape that Bobby is not looking at directly, or so much as hint at anything that Bobby doesn’t know yet, or even comment on those things that Bobby knows so well that he doesn’t have to think about them. If you do -- if at any single point you allow the voice of a separate, disembodied narrator to intrude with outside information -- the reader will ever afterward be in a state of confusion about which parts of the narrative belong to Bobby (or his counterpart in any given scene) and which parts don’t.
C. J. Cherryh, who happens to be one of my favorite writers, does this kind of thing very, very well. If this is a style you want to continue to explore, you might want to take a close look at her writing -- especially taking note of the fact that even when she lets you see every thought that passes through a character’s mind she manages to avoid direct quotations from the inner monologue (the bits that ordinarily go into italics, but which you are including without them). Perhaps it’s just a matter of taste, but where I find your transitions -- in and out of the narration, in and out of your character's thoughts -- a little rough, hers are always so seamless I’m never aware of them while I am reading.
As a reader and as a writer, I tend to be particularly aware of an author’s style and whether or not I think it suits the material. Every writer has things they obsess about, and style is one of mine. I know that some writers favor a transparent style but as far as I am concerned style and story are, or should be, intimately linked.
Cherryh has many strengths as a writer, but one of the strongest is her ability to write about people (human or otherwise) under pressure. Her characters are always questioning, second-guessing themselves, thinking ahead, anticipating the worst, plotting, trying to evade plots, scolding themselves for their mistakes ... their minds are never at rest. Not infrequently, she puts them into situations where there is physical stress as well. She has no mercy on her characters when it comes to pain, but even when the discomfort is relatively mild, she’ll often augment it with two or three other physical irritants. Where somebody else’s character would be limping across the wilderness with a twisted ankle, Cherryh’s guy probably has blisters, sunburn, and mosquito bites, too. And her particular style brings her readers into such close identification with her characters that they get to experience it all! It can be an exhausting experience reading a book by C. J. Cherryh.
And all of this, of course, is a fabulous way of exploring her people’s personalities. What individuals say and do in a crisis can be a great revelation of character, in fiction as in life, but in fiction you have the additional opportunity (if the writer chooses to take it) of contrasting what they say and do with what they are actually thinking while they do it. What they wanted to do ... what they almost did ... what it was that prevented them and motived them to do the other thing instead ... all this can add tremendous depth to the characterization.
There is, however, a danger in all this, and Cherryh sometimes walks right into it. Her characters can be so paralyzed by conflicting motives, by making alternate plans, by trying to anticipate the next move of their opponents, that the action just
stops for a considerable period of time, while they argue with themselves and each other about what to do next. This, depending on the tastes of the reader, is not necessarily a bad thing, since she is also very good at dialogue, and the arguments both internal and external can be tremendously entertaining in themselves -- yet even loyal fans occasionally find that these sequences try their patience almost too far.
But enough about Cherryh. When I come back a little later, I’ll try to talk about some of the ways I approach characterization myself.