On whether or not you're cut out for the role, my own take is that if you get onto a VS and any firm in the City, you are 100% TC material. This is not just something I'm saying after my own experience, but it's something I'm saying having seen my own friends and people on this forum like Alice and Dan go through the same thing. You don't make it that far in the process unless the firm already sees your potential as a trainee. And if that one firm saw that potential, other firms are going to see it too - so yes you are definitely cut out for the job!
I think that sometimes converting a VS into a TC offer has very little to do with your skill as a candidate either. It can come down to super arbitrary things like whether or not the firm felt you were the right fit, whether your interviewing partners just liked other candidates more etc. Point being it's not always about things that you could have controlled and it's not always about whether you're "cut out" for it. I know it's easier said than done but hopefully seeing it this way will stop you from beating yourself up and questioning your abilities.
I also really want to drive home how many things you're already doing right. You definitely write good applications, you definitely have commercial awareness and you definitely know how to perform well in interviews - don't forget that because of how extra competitive this cycle has been with COVID, you've also beaten tougher odds than usual to get to the VS. There may be some room for improvement and hopefully the feedback the firm provides you with is useful in helping you identify that, but skill-set wise you absolutely have what it takes!
On whether or not you'll be able to convert your next VS, I think your chances of converting your next scheme are going to increase tenfold no matter what. I found that just because I had done a vac scheme before I understood better what I should and should not be doing during the scheme and the small extra things I could do that would tilt things in my favour. You'll understand better than most first time vac schemers how to produce good work, how to build rapport with your supervisors, what kind of questions to asks during presentations and so much more. Much like the application process, vacs are definitely something you can get better at with practice, and the fact that you've already had one experience is going to help you ace the next one even more.
I hope that at least some of this has helped and I really hope you do feel better. I may not know you but I seriously don't have a single doubt that you're going to be made that TC offer very soon.