The most important aspect for each level of play IMO -
For low level play - Just having the spacing and fundamentals down solid, knowing the characters and combos. And don't SD, no stupid deaths off the edge for trying some snazzy ledgeplay/edgeguard
For mid level play - advanced movement and punish game
For high level play - DI, especially combo DI and SDI/ASDI.....other wise you will get 4 stocked by much better players. They are counting on you not escaping common combos. SDI/ASDI to escape/survive things like like Fox Up Air and shallow angle attacks like Shiek/Falcon's Fair.
For Professional level play - mindgames
How do you get better at reads??
He was most likely just throwing it out to be cheeky, but there is a way as far as move sets are concerned. Learn to recognize the start up animations of all the moves/techs/get-ups that can be reacted to. I'd set up the Gifs to where it's the first 2-4 frames of each character's moves/etc and I'd have to correctly guess what they were about to do and how fast I could identify it. This helps with your punish game a lot.
Other reads such as anticipating movement and reading your actual opponent's habits are a natural learning process that comes only with lots of human player experience and natural intuition.