All those in comments saying the MC dense & retard actually missed the important point.
It's not that he dosen't realized what she's trying to say, he's trying to deny that possibility bcoz:-
His close childhood friend going away from him gradually over the years without any solid reason( he doesn't even have a clue) despite being in the same class must have hit him hard in the kokoro.
He must have over-judged himself & thought it's just bcoz he is boring/uninteresting , she distanced herself away from him & that's why he's afraid of making friends, so things will just going to be repeated. Also, his inferiority complex getting worse with passage of time.
How would you believe the girl is confessing to you after cutting of all the communication while being so near, & most of the time surrounded by other students, and now after 3-4 years, she suddenly giving such hints despite taking things slow, he's clearly having trouble accepting all these.
Well, they both had slightly different take on rejection/heartbreaks,
As after hearing him say "chicks like that" & "he's into gyaru" , it had hurt her very much since she was head over heels for him & always she was the one pushing for romantic things.
So, she decided to cut her off from him to not get hurt again & make other friends , so she can cope up with her loss.
And,
He was the one who always stands up for her when she's in trouble.
So, seeing him do that again for her might have given her more resolve to act up on her feelings, since she realized, if she didn't take the initiative herself, their relationship will never be repaired. Or she might lose him forever.