In my story, I can't seem to stop going back and rewriting a ton of the story, therefore I make no progress. My question is, is proofreading necessary before you finish the story, or should I just finish it first, THEN go back?
My habit is finishing it and going back. A lot of the rewrites I rewrite generally get rewritten when I finish the story anyway just to make everything fit as snug as it can, so it doesn't make a lot of sense to me to put a whole lot of work into parts that I may have to axe or eviscerate anyway. So, based on my experience, I don't recommend editing as you go, but you find whatever system works for you.
Finish it first. There's nothing wrong with going back and re-reading to make sure you're not missing anything later on in the book, but don't stop and edit. It's the brain's way of distracting you from finishing. Editing is a lot easier than writing is.
I think you've answered your own question. You are making no progress. Therefore you need to change your approach? People all work differently. Some folks like to edit to perfection as they go. That's fine, as long as they do go—all the way to the end. That's their working method, and it works for them. However, it doesn't seem to be working for you. So maybe just blaze ahead with your story and join the many writers (including me) who do their editing at the end of the process. See how you get on? It's certainly possible to 'proofread' for SPAG errors as you go, and maybe re-read what you wrote yesterday and correct any obvious mistakes. If you catch yourself making the same SPAG errors over and over, then a daily 'proofreading' session can keep you from continuing to make them. It can also provide a bridge to get you into 'today's' writing session. I'd say don't spend too much time trying to engineer perfection into an unfinished story, though. That method doesn't appear to work for you—and it certainly doesn't work for me. At best, it's going to be frustrating and will take you ages. At worst, you will never get done at all. Even if your 'errors' are major ones—structural problems, or character development that needs to change—you can still benefit from having a finished piece to work with. I know I made major structural changes to mine after I finished my first draft and got it out to my first tranche of beta readers. These included swapping the chronological order of a few chapters, eliminating some chapters, writing one new transitional chapter, combining two chapters into one, changing my POV character in two chapters. I did a complete revamp of the opening chapters, and just finished making changes in my penultimate chapter. I also dumped a fair amount of backstory, simply because saddling my characters with too much backstory made it more difficult to justify certain story developments. Removing some backstory made a lot of the 'present' story more plausible. It eliminated lots of stuff I now don't have to explain. My nearly final version hardly resembles my original first draft, and has been cut by well more than a third. However, I didn't see the 'mistakes' I'd made until the whole thing was there in front of me. Instead of being discouraged by the 'mistakes' I was incredibly eager to get them corrected. Like the clearout of a cluttered house, this exercise was cathartic and pleasurable. I have also learned a lot, and will probably not make so many large mistakes in my next novel.