Does Identifying sounds of words help with understanding meaning?

A recent revelation I’ve had is that I am not breaking down the sounds of words whilst listening.

Although I’m listening, I’m trying to understand the meaning based on my association with the word which then is referred to mentally and in a written form via sound. (I think this is making it harder for myself.)

It feels I’m trying to do too much at once, I.e. understand the word with the sound associated with it instead of the sound of the word first, allowing the meaning come with associative practice. Is this better to do, or are there other ways I could approach this?

NOTE - 1. I currently listen to any lesson first in its entirety.
2. then listen to each sentence again in sentence mode. 3. then translate and read. 4. then finally listen once more.

Any ideas?

I’m not even sure what you’re asking because you’re speaking in abstract terms and not giving any examples. What do you even mean by your association with a word? A word has contextual meaning based on the other words surrounding it. But a word generally sounds the same, regardless of the context.
For example:

We have a lot in common. We share so many of the same interests.
At first this salad looked so common, but my taste buds say otherwise.

When learning a second language (in my case Dutch) I learn not only the meaning but usage of words by doing a lot of reading but also by listening and having conversations because the way some words are used only comes out in conversation. Like modal particles, for example, which don’t even have a particular meaning. Reading doesn’t do it, as they mostly occur in spoken language. Even in fictional dialogue in books they don’t occur at the same rate as they do in the spoken language.

There are also sound patterns that you get used to when certain phrases are used, even though the individual words are run together and not spoken distinctly. (‘Op een gegeven moment’ comes to mind in Dutch.) Not to mention dialect which can be difficult to understand even for native speakers. The best you can strive for is a semblance of the standard language, unless you’re planning on living in a particular city or village. Then it would behoove you to learn the local dialect.

The best way to learn any word is to read or hear it in context. Then it just “clicks” or otherwise makes an impression on you.

In any case, you probably need to discuss your concerns with native speakers. Maybe try finding a language learning server for the language you are trying to learn. Have you tried Discord? Maybe search for apprendre le français discord and see what comes up.